annual report 2017
human
forward.

contents
randstad at a glance
management report
governance
financial statements
supplementary information
contents.
randstad at a glance
4 key figures 2017
6 message from the CEO
8 value creation model
9 about us
14 our global presence
15 geographic spread
16 human forward
20 our ultimate goal
management report
24 the world around us
30 our strategy and progress
32 leading digital strategy
35 our value for clients and candidates
41 our value for employees
46 our value for investors
51 our value for society
59 sustainability basics
68 reporting framework
70 performance
86 risk & opportunity management
governance
98 executive board
100 supervisory board
102 report of the supervisory board
111 remuneration report
117 corporate governance
financial statements
124 contents financial statements
125 consolidated financial statements
129 main notes to the consolidated financial statements
152 notes to the consolidated income statement
156 notes to the consolidated statement of financial position
165 notes to the consolidated statement of
cash flows
168 other notes to the consolidated financial statements
180 company financial statements
182 notes to the company financial statements
186 other information
supplementary information
198 glossary
203 sustainability and industry memberships and partnerships
204 certifications, rankings, and awards
206 highest randstad positions in industry associations
207 financial calendar
208 history timeline
annual report 2017
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randstad
at a glance.
contents
randstad at a glance
management report
governance
financial statements
supplementary information
4 key figures 2017
6 message from the CEO
8 value creation model
9 about us
14 our global presence
15 geographic spread
16 human forward
20 our ultimate goal
annual report 2017
3

contents
randstad at a glance
management report
governance
financial statements
supplementary information
key figures 2017.
revenue in millions
€ 23,273
› 72
underlying EBITA margin
 
4.6%
› 72
adjusted net income
in millions
€ 756
› 72
number of candidates
working (on a daily basis)
 
668,800
› 70
leverage ratio
0.9
› 72
free cash flow in millions
€ 586
› 72
randstad outperformance
68%
› 41
proposed dividend
per ordinary share
€ 2.76
› 46
number of permanent
placements
212,200
› 70
number of employees
trained in business
principles
13,000
› 59
number of VSO volunteer
hours
15,200
› 51
women in senior
leadership positions
47%
› 41
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randstad at a glance
management report
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supplementary information
key financials.
in millions of €, unless otherwise indicated
2017
2016
Δ
Underlying1
Revenue
23,272.8
20,684.1
13%
Gross profit
4,707.9
3,934.2
20%
EBITA2
1,065.3
946.7
13%
Actual
Revenue
23,272.8
20,684.1
13%
Gross profit
4,705.5
3,934.2
20%
EBITA2
993.7
892.0
11%
Net income
631.4
588.2
7%
Free cash flow3
585.6
464.6
26%
Net debt4
1,025.7
793.4
29%
Leverage ratio (net debt/12-month EBITDA)
0.9
0.8
Shareholders' equity
4,251.0
4,140.1
3%
Ratios (in % of revenue)
Underlying1
Gross margin
20.2
19.0
EBITA margin
4.6
4.6
Actual
Gross margin
20.2
19.0
EBITA margin
4.3
4.3
Net income margin
2.7
2.8
Share data
Basic earnings per ordinary share (in €)
3.38
3.15
7%
Basic earnings per ordinary share, underlying (in €)5
4.13
3.77
10%
Diluted earnings per ordinary share, underlying (in €)5
4.11
3.75
10%
Dividend per ordinary share (in €)
2.76
1.89
46%
Payout per ordinary share (in %)6
67
50
34%
Closing price, year-end (in €)
51.24
51.53
(1%)
Market capitalization, year-end
9,390.4
9,431.2
0%
Enterprise value, year-end7
10,416.1
10,224.6
2%
Employees/outlets
Average number of candidates working
668,800
626,300
7%
Average number of corporate employees
37,930
32,280
18%
Number of branches, year-end8
2,900
2,974
(2%)
Number of Inhouse locations, year-end8
1,958
1,778
10%
1 Underlying: actual gross profit and EBITA adjusted for one-offs, such as restructuring costs, integration costs, and acquisition-related expenses.
2 EBITA: operating profit before amortization and impairment of acquisition-related intangible assets and goodwilll.
3 Free cash flow: sum of net cash from operating and investing activities, excluding the acquisition and disposal of subsidiaries and associates, and dividends from associates.
4 Net debt: cash and cash equivalents minus borrowings.
5 Before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs, acquisition-related costs, and one-offs.
6 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 one-offs.
7 Enterprise value: the total of market capitalization and net debt.
8 Branches are outlets from which various clients are served with various numbers of services and which are located in residential/commercial areas. Inhouse locations are
outlets from which one client is served with a limited number of job profiles and which are located on the site of the client.
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randstad at a glance
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supplementary information
Dear Stakeholder,
We can look back on another exciting year for Randstad.
Our revenue rose organically by 8% in 2017, the highest
level of growth since 2011, and we are proud to have
shown outperformance in most relevant markets.
Europe remained a key contributor to our strong
performance with double-digit sales growth in 2017. Our
EBITA margin was stable year-on-year at 4.6% (rising to
4.8% when adjusted for digital investments), reflecting
a solid incremental conversion ratio of 40%. Our free
cash flow increased by 26% year-on-year to
€ 586 million, resulting in a comfortable leverage ratio
of 0.9 at year-end 2017.
Given our primarily organically focused Tech & Touch
strategy, our strong balance sheet, and our favorable
free cash flow outlook in various economic scenarios,
we will adjust our capital allocation strategy. We will
implement a conditional cash floor dividend of € 1.62,
while introducing optional additional cash returns in the
event of a leverage ratio below 1.0. For 2017, we propose
an all-time-high cash dividend of € 2.76 per ordinary
share, consisting of a regular dividend of € 2.07 (2016:
€ 1.89), representing a payout of 50% and a special
dividend of € 0.69.
Most acquisitions made in 2016 are on track or even
ahead of schedule. Obiettivo Lavoro in Italy, for
example, performed particularly well, growing by more
than 20% in the first year of integration. Randstad and
Obiettivo Lavoro clearly complement each other in
terms of clients and regions, and we have quickly been
able to create a golden combination. We also expect
Monster to add significant value to our business in the
coming years, particularly given the unprecedented
volume of data we have access to.
In fact, data management will become increasingly
important for Randstad going forward. Strong data,
combined with our human touch, will give us a clear
competitive advantage – not only over smaller players
for whom we raise the barriers to entry, but also over
larger, more traditional HR services providers. Our scale,
combined with the opportunities offered to us by our
Tech & Touch strategy, places us in a position that is
both unique and unprecedented.
Although we are increasingly becoming a data-driven
business, digital will not be the be-all and end-all of what
we do. We are integrating technology into our everyday
activities in such a way that we create experiences for
our clients and candidates that are smart, personal and
effective. Ultimately, it is about the right kind of interplay
between technology and people. The transformation we
are going through as a company culminated in the
launch of our new brand promise in the last quarter of
2017: Human Forward. It is also the theme of this year’s
annual report, and we explain the rationale behind it on
the dedicated theme pages.
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message from the CEO
As an influential HR services provider, we see it as our
responsibility to act as a thought leader and play an
active role in developing the industry. We know our
markets inside out, and we see what works well and what
does not. That is why we always aim to contribute to
better functioning labor markets. On the one hand, this
means making it possible for people all over the world
to have a meaningful job. On the other hand, it means
simultaneously matching shortages and surpluses, not
only at local level, but also internationally. This includes
providing relevant training opportunities for candidates
where appropriate, enabling them to continuously
develop their skills and their employability in an ever-
changing world of work.
Now that our digital foundation is in place, we will focus
on its rollout and execution, creating organic value in a
number of different ways. We have identified large
addressable markets that Randstad can serve, and by
raising the barriers to entry for other players, we aim to
gain further market share. In addition, we will
increasingly focus on supporting candidates not just in
the short term, but throughout their careers. Our digital
foundation will make it easier for us to stay in touch with
candidates we have placed, and help them again in the
next steps they will take.
One of the most important goals we aim to achieve in
the coming years is to create the best possible working
environment for our consultants. Supported by
advanced technological solutions, they will be able to
focus on those aspects of their job that they enjoy most
and which they are best at: making great connections
between clients and candidates. This is where we want
to grow and show our leadership. We have put this
ambition into words in our ultimate goal: by 2030, we
will touch the work lives of 500 million people
worldwide. It is a challenge we are taking on with
confidence.
Finally, on behalf of the Executive Board, I would like to
take this opportunity to thank all our stakeholders for
their continued support and trust in our company. And,
of course, heartfelt thanks go to all colleagues
worldwide for together delivering a very good year!
Best regards,
Jacques van den Broek
candidates placed in jobs
temporary placements (average per day)
permanent placements (annually)
2015
2016
2017
300,000
400,000
500,000
600,000
700,000
50,000
100,000
150,000
200,000
250,000
revenue in millions of €
11,186
11,400
12,184
4,216
4,461
5,185
3,816
4,067
4,720
757
1,184
staffing
inhouse services
professionals
global businesses
total revenue 2015:
€ 19,219
total revenue 2016:
€ 20,684
total revenue 2017:
€ 23,273
0
5,000
10,000
15,000
20,000
25,000
annual report 2017
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clients
We help our clients to find 
the best talent with the 
most relevant skills for their 
business. Our technological 
expertise, combined with our 
human touch, enables us to 
focus on our clients’ business 
needs by providing tailor-
made solutions and the best 
personal advice.
candidates
We help candidates in finding 
jobs and developing their 
skills so they can have a 
meaningful career. Our 
data-driven insights enable 
us to quickly identify smart 
career opportunities and 
make the perfect match. 
Candidates are personally 
guided to short- and long-
term career success.
employees
We are an attractive employer 
for our employees by oﬀering 
continuous development and 
career opportunities. 
Data-driven insights help our 
employees to focus on what 
really matters in their job: 
serving clients and 
candidates even better.
investors
Our strategy and ambitions 
ensure long-term economic 
value creation for our 
investors. We aim to optimize 
shareholder returns over time.
society
Having a meaningful job 
impacts people’s lives. 
Through proactive and 
constructive dialogue with 
governmental authorities and 
other relevant bodies and 
institutions, we help shape  
the world of work, maximizing 
future employment and 
economic growth.
value created 
and shared
input
output
our key 
assets
human
Randstad attracts bright, 
agile, adaptable and 
human-focused people, 
with a transformational 
and change orientation. 
In addition, we constantly 
develop our employees’ 
skills and compentencies 
so they can deal with 
and respond to rapidly 
changing circumstances.
intellectual
Our knowledge and 
experience, thought 
leadership and superior 
brands help us to attract 
and retain the best people 
and ensure that our clients 
and candidates can count 
on the highest quality 
service. 
technological
We acquire external 
knowledge and expertise 
through acquisitions, 
partnerships and minority 
stakes in startups and 
scale-ups. At the same time, 
we are innovating from 
within, scaling up innova-
tions quickly around the 
world. 
external 
relationships
Randstad actively partici-
pates in industry and 
employer bodies and 
regularly interacts with other 
influential organizations. 
As a thought leader in our 
industry, we help shape 
the world of work, while 
contributing to a clear, fair 
and workable regulatory 
environment in our global 
markets.
financial
We aim to have a balanced 
mix of debt and equity 
investments (including 
institutional investors) and 
a sound financial position, 
with a leverage ratio of <2.
value creation model.
• globalization • technology • demographics 
• variety of work forms • governance of work
trends and growth drivers
client
match
candidate
what
core
values
building
blocks
strategy
how
why
mission
ambition
purpose
positioning
The Randstad value creation model builds on a strong foundation. It follows the sequence from input of our key assets to the 
way Randstad adds value, resulting in the value we create and deliver, while simultaneously promoting the interests of all 
stakeholders. All elements of our business and the value created for our stakeholders are explained in detail in this annual report.
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who
Randstad is a global leader in the HR services industry
and specialized in solutions in the field of flexible work
and HR services. Randstad was founded in 1960 and is
headquartered in Diemen, the Netherlands.
why
mission
ambition
purpose
positioning
our purpose
We support people and organizations in realizing their true
potential.
our mission
Shaping the world of work.
our ambition
By 2030, we will touch the work lives of 500 million people
worldwide.
our positioning
A trusted human partner in the technology-driven world of talent.
randstad in numbers
39
countries
4,858
outlets
 
37,930
corporate  
employees
€ 23.3
 
billion revenue
about us.
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about us.
what
We help candidates with jobs and with developing their skills
in order to have a meaningful career. We help our clients to
find the best talent with the most relevant skills for their
business by offering the following services:
staffing
In Staffing, our largest business, we focus on recruiting blue-
collar and white-collar candidates. Staffing covers temporary
staffing, permanent placements, payrolling, training, and
specialties focusing on specific market segments.
inhouse services
Inhouse Services is a unique solution for managing a
workforce with specific skill sets for which there is a
fluctuating level of demand. It is aimed at improving clients’
labor flexibility, retention, productivity and efficiency. We
work on-site, exclusively for our clients, providing a large
number of candidates.
 
client
match
candidate
professionals
For middle and senior leadership positions, we recruit
supervisors, managers, professionals, interim specialists and
consultants with an academic or equivalent qualification from
a wide range of industry backgrounds. Professionals covers
both temporary and permanent placements.
global businesses
Under Global businesses, we provide
clients with a range of services, such as
job positioning and résumé services on
our digital platforms, managed services
programs (MSP), recruitment process
outsourcing (RPO) and outplacement.
how
core
values
building
blocks
strategy
Through our strategy, we create long-term value for all our
stakeholders, bearing our ultimate goal in mind. Our strategy is based
on four building blocks: strong concepts, best people, excellent
execution, and superior brands. Aligned with the drivers of our
ultimate goal, these building blocks only work in unison. Strong
concepts are of little value without the right people to make them
work. Excellent execution is impossible without the right concepts
and the best people. The synergy of these three building blocks
guarantees our fourth: superior brands.
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about us.
core values
to know
We are experts. We know our clients, their companies,
our candidates and our business. In our business it is
often the details that count the most.
 
striving for perfection
We always seek to improve and innovate. We are here to
delight our clients and candidates in everything we do.
This gives us our edge.
 
to serve
We succeed through a spirit of excellent service,
exceeding the core requirements of our industry.
simultaneous promotion of all interests
We see the bigger picture, and take our social
responsibility seriously. Our business must always
benefit society as a whole.
to trust
We are respectful. We value our relationships and treat
people well.
Our core values, established in the
company’s early days, guide our
behavior and represent the foundation
of our culture. They help us develop,
grow and better serve our clients,
candidates and other stakeholders.
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our key brands.
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our global presence.
north america
• revenue € 4,230.5 million
• 5,720 corporate staff
• 100,900 candidates (avg. weekly)
• 1,111 outlets, including 440
inhouse locations
europe
netherlands
• revenue € 3,333.9 million
• 4,230 corporate staff
• 81,800 candidates (avg. weekly)
• 650 outlets, including 383
inhouse locations
france
• revenue € 3,627.0 million
• 4,140 corporate staff
• 86,600 candidates (avg. weekly)
• 669 outlets, including 234 inhouse
locations
germany
• revenue € 2,335.1 million
• 2,740 corporate staff
• 49,500 candidates (avg. weekly)
• 582 outlets, including 307 inhouse
locations
belgium & luxembourg
• revenue € 1,568.6 million
• 2,070 corporate staff
• 45,600 candidates (avg. weekly)
• 317 outlets, including 169 inhouse
locations
iberia
• revenue € 1,427.4 million
• 2,030 corporate staff
• 68,400 candidates (avg. weekly)
• 354 outlets, including 124 inhouse
locations
italy
• revenue € 1,504.1 million
• 2,090 corporate staff
• 47,400 candidates (avg. weekly)
• 275 outlets, including 28 inhouse
locations
other european countries
• revenue € 2,151.2 million
• 3,810 corporate staff
• 66,600 candidates (avg. weekly)
• 463 outlets, including 186 inhouse
locations
rest of the world
• revenue € 1,911.3 million
• 5,000 corporate staff
• 111,300 candidates (avg. weekly)
• 302 outlets, including 86 inhouse
locations
global businesses
• revenue € 1,183.7 million
• 5,880 corporate staff
• 10,700 candidates (avg. weekly)
• 135 outlets
We have the following alliances to
expand our reach: Ancor (Russia
and Commonwealth of
Independent States), Dayalima
(Indonesia) and Staffpoint (Finland).
annual report 2017
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geographic spread.
As a result of acquisitions and changes in the governance and managerial reporting
structure of the Group, the external (primary) segmentation has changed as of 2017. We
created an additional segment called Global Businesses, consisting of Monster, Randstad
Sourceright, RiseSmart, and twago. Italy is now reported as a separate segment due to its
increasing size, while the UK has been included in the segment 'Other European countries'
due to its limited size. External (secondary) segmentation on revenue categories now also
shows Global Businesses besides Staffing, Inhouse Services, and Professionals. All
comparative figures for prior periods have been adjusted accordingly for presentation
purposes.
geographic spread of staffing revenue
staffing revenue € 12,184 million
14%
15%
18%
9%
8%
9%
10%
7%
10%
geographic spread of professionals revenue
professionals revenue € 4,720 million
37%
9%
16%
11%
3%
1%
15%
8%
geographic spread of inhouse services revenue
inhouse services revenue € 5,185 million
15%
21%
14%
14%
8%
5%
5%
11%
7%
split by geography
2017: total revenue € 23,273 million
18%
14%
16%
10%
7%
6%
7%
9%
8%
5%
north america
iberia
netherlands
italy
france
other european countries
germany
rest of the world
belgium & luxembourg
global businesses
annual report 2017
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With our Tech & Touch strategy we have 
embarked on a journey into the future, 
transforming ourselves in a way that will 
strengthen our leading role in the HR 
­services industry for years to come. It 
­means changing the way we think and 
work, and it creates the need for a new, 
strong Randstad brand positioning.
New, digital HR solutions and tools are disrupting our
market by drastically changing the way people connect
to jobs and the role we play in this space. Clients and
candidates expect to be served anywhere, anytime, and 
through any device, in a way we never imagined possible 
before, influencing the way we work.
Therefore, Randstad is investing heavily in new 
technologies, making a giant leap forward into the  
world of tech. We are acquiring external knowledge  
and expertise through acquisitions and the Randstad 
Innovation Fund, and innovating through our Digital 
Factory. It will enable us to shape our new role and 
ensure our leading position in an industry becoming 
predominantly digital and data driven.
the world is changing
We live in a post-digital age, an era of constant 
technological change, transforming rapidly the way  
we live, work and relate to each other. Technology has 
become an everyday component in our lives; it is the 
invisible engine that powers the world around us. In a 
24/7 economy, clients have different needs. The way  
they work is changing and this also influences the  
skills and talent they need.
human
forward. 
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annual report 2017
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By combining our 
passion for people 
with the power of 
­today’s technology, 
we will create an 
­experience that is 
­inherently more  
human.
Where others brace for disruption, we see underlying
continuity. Our ongoing journey is not just about digital
transformation. While innovative technology will be
necessary for connecting clients and candidates in the
future, improving our tools is not the end of the story.
Offering a seamless digital experience is only the price  
of entry – what matters most and will have a greater 
impact than ever before is our unique added value: the 
human touch we bring to the table. In a fast changing 
digital world clients and candidates want a trusted 
human partner. It is here, at the intersection between 
technology and humanity, where we can distinguish 
ourselves from our competitors by delivering a true 
human experience.
where we come from
We know from our heritage that real connections are  
not made from data and algorithms – they require human
involvement. Empathy. Intuition. Instinct. These human
qualities have defined Randstad from the very beginning.
They express the strong values on which Randstad was
founded and which remain relevant today: to know, 
to serve and to trust, striving for perfection and the 
simultaneous promotion of all interests. In knowing 
more, we can better serve our clients and candidates, 
delighting them by creating relationships based on 
trust. This trust is enhanced by continuously striving for 
perfection, while simultaneously promoting the interests 
of all our stakeholders and society as a whole.
Living by these core values has provided us with a deep
knowledge of clients and candidates spanning more
than 55 years. With this in-depth understanding of the
world of work, we support candidates in realizing their 
true potential and enable employers to sustain their 
success. Our values ensure that people are always at the 
heart of our process.
making a meaningful difference
In a world focused on disruptive technologies, our 
humanity ensures continuity. We know from our heart
and history that it is the human side of our business that
makes the difference. We know how important a job is in
a candidate’s life. And we always have been passionate
about supporting people and organizations in realizing 
their true potential. That is Randstad’s role in society. 
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human forward.
annual report 2017
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Today, we are in the unique position to redefine the way 
we connect with our clients and candidates. Becoming 
the trusted human partner in the technology-driven world  
of work will lead to even higher appreciation from those  
we serve. It will provide our clients and candidates with the 
human insight and attention they desire. And, ultimately, 
it will enable us to maximize future employment and 
contribute to economic growth for society as a whole. 
By combining our passion for people with the power of 
today’s technology, we will create an experience that is 
inherently more human.
We call it human forward.
Each of us is committed to going above and beyond to 
make our candidates and clients successful. To achieve 
this goal, we use technology to our advantage. We apply 
digital innovations to improve our services. To make 
processes smart, simple, and efficient. To get better 
insights, based on data.
At the same time, we recognize these efficiencies for 
what they are: a means to an end. A means to free  
up our people to focus on our most important asset  
– the personal connection. Creating an HR experience 
that is more human. One that allows us to ask the 
right questions. To dive deeper than a résumé or a job 
opening. To understand the heart and soul of a company. 
To propel our clients and candidates forward. 
This is the essence of our Tech & Touch strategy. Tech  
enabling our Touch, by empowering our people to change 
the way we think and work, supported by technology.
our humanity
ensures
continuity.
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human forward.
annual report 2017
18

Today, we are in the unique position to redefine the way 
we connect with our clients and candidates. Becoming 
the trusted human partner in the technology-driven world 
of work will lead to even higher appreciation from those 
we serve. It will provide our clients and candidates the 
human insight and attention they desire. And, ultimately, 
it will enable us to maximize future employment and 
economic growth for society as a whole. By combining 
our passion for people with the power of today’s 
technology, we will create an experience that is 
inherently more human.
We call it human forward.
us is committed to going above and beyond to make  
our candidates and clients successful. To achieve this 
goal we use technology to our advantage. We apply 
digital innovations to improve our services. To make 
processes smart, simple, and efficient. To get better 
insights, based on data.
At the same time, we recognize these efficiencies for 
what they are: a means to an end. A means to free  
up our people to focus on our most important asset  
– the personal connection. Creating an HR experience 
that is more human. One that allows us to ask the 
right questions. To dive deeper than a resume or a job 
opening. To understand the heart and soul of a company. 
To propel our clients and candidates forward. 
This is the essence of our Tech & Touch strategy. Tech  
enabling our Touch, by empowering our people to change 
the way we think and work, supported by technology.
Today, we are in the unique 
position to redefine the way 
we connect with our clients 
and candidates. Becoming 
the trusted human partner 
in the technology-driven 
world of talent will lead to 
even higher appreciation 
from those we serve.
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human forward.
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our ultimate goal.
To underpin our commitment to maximizing future
employment and contributing to economic growth for
society as a whole, we have set our ultimate goal:
by 2030, we will touch the
work lives of 500 million
people worldwide
Our ultimate goal gives words to what we feel and what
unites us as a company. It is what we believe in and
where we want to go. But it is not just about words. We
have developed a roadmap to achieve this ambition. We
call it our 500 Million People Plan. In this plan, we have
identified four drivers for which we will set objectives
and KPIs. By rigorously and conscientiously committing
ourselves to these objectives, we will be taking the
necessary, and measurable, steps towards our ultimate
goal.
driver 1: contributing to economic growth 
Contributing to economic growth is the most obvious
way to create more jobs, which will allow us to touch the
work lives of more people.
driver 2: connecting with people
We will connect with people beyond search, selection,
and staffing. Through our online platforms and smart
solutions, we aim to be present at all stages in a person’s
career.
driver 3: fostering inclusive employment
We will support the inclusion of people who experience
a distance to the labor market, whether it is because of
gender, age, ethnicity, disability, or something else. We
strongly promote equal opportunities and human and
labor rights in order to maximize future employment for
as many people as possible.
driver 4: shaping the world of work
As a global player in the labor market, Randstad has in-
depth knowledge of the world of work. Through our daily
interaction with clients and candidates, and our
continuous dialogue with governments and labor
organizations, we take the lead in shaping the world of
work. By contributing to better functioning labor
markets in this way, we create for ourselves the
opportunity to touch the work lives of more people.
If we aim to touch the work lives of 500 million people
worldwide by 2030, we will need to grow, and we will
need to grow sustainably. There will be no other way
than to constantly innovate in order to increase our
impact. And this is exactly what we are doing as part of
our Tech & Touch strategy. Technology will improve our
services and free up precious time, which we can then
use for the most important value that we have to offer to
our clients and candidates: our human touch.
We know from our heritage that it is our empathy, our
intuition, and our passion for people that make us
successful. We believe that it is the human side of our
business that makes the difference. Our ultimate goal
therefore forces us to develop an HR experience that is
more human than that of our competitors, so we can
truly touch people’s work lives.
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our ultimate goal.
sustainable development
goals
In September 2015, the UN launched its 17 Sustainable
Development Goals (SDG). Countries have adopted
these goals to end poverty, protect the planet, and
ensure prosperity for all by 2030. Randstad aims to
contribute to a sustainable future, both socially and
economically, through facilitating the development of
fair and efficient labor markets across the world. We
have therefore committed ourselves to the UN’s
Sustainable Development Goals, in particular with
regard to promoting sustainable economic growth,
decent work for all, and reducing inequalities.
As an HR services provider, Randstad specifically
contributes to four goals and their relevant subtargets:
goal
our contribution
subtargets
SDG 4: We help to ensure
inclusive and equitable quality
education and promote lifelong
learning for all.
SDG 4.4 - Increasing the number of youth and adults who have relevant skills,
including technical and vocational skills, for employment, decent jobs and
entrepreneurship.
SDG 5: We help to achieve
gender equality and empower all
women and girls.
SDG 5.1 – End all forms of discrimination against all women and girls
everywhere.
SDG 5.5 – Ensure women’s full and effective participation and equal
opportunities for leadership at all levels of decision making in political,
economic and public life.
SDG 8: We promote sustained,
inclusive and sustainable
economic growth, full and
productive employment and
decent work for all.
SDG 8.2 – Achieve higher levels of economic productivity through
diversification, technological upgrading and innovation, including through a
focus on high-value-added and labor-intensive sectors.
SDG 8.3 – Promote development-oriented policies that support productive
activities, decent job creation, entrepreneurship, creativity and innovation, and
encourage the formalization and growth of micro-, small- and medium-sized
enterprises, including through access to financial services.
SDG 8.6 – Reducing the proportion of youth not in employment, education or
training.
SDG 8.8 – Protect labor rights and promote safe and secure working
environments for all workers, including migrant workers, in particular women
migrants, and those in precarious employment.
SDG 10: We want to reduce
inequality within and among
countries.
SDG 10.2 – Empower and promote the social, economic and political inclusion
of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or
economic or other status.
SDG 10.3 – Ensure equal opportunities and reduce inequalities of outcome,
including by eliminating discriminatory laws, policies and practices and
promoting appropriate legislation, policies and action in this regard.
SDG 10.4 – Adopt policies, especially fiscal, wage and social protection
policies, and progressively achieve greater equality.
In our reporting framework, we also highlight the SDGs
and their relevant subtargets to which Randstad can
contribute most.
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safe harbor statement
This management report contains forward-looking
statements on Randstad Holding nv’s future financial
performance, results from operations, and goals and
strategy. By definition, forward-looking statements
generate risk and uncertainty because they refer to
events in the future and depend on circumstances that
cannot be foreseen in advance. Numerous factors can
contribute to material deviation from results and
developments indicated in forward-looking
statements. Such factors can include general
economic circumstances, scarcity on the labor market,
demand for (flexible) personnel or our other HR
services, entry into new markets, the provision of new
services, changes in staffing and labor legislation,
personnel costs, future exchange and interest rates,
changes in tax rates and subsidies, future corporate
mergers, acquisitions and divestments, and the
development of technology. You should therefore not
place undue reliance on these forward-looking
statements. They are made at the time of publication
of the annual financial statements of the company and
in no way provide guarantees for future performance.
All operating and business environments are subject to
risk and uncertainty. For this reason, we can offer no
assurances that the forward-looking statements
published here will prove correct at a future date, and
the company assumes no duty to update any such
forward-looking statements.
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management
report.
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24 the world around us
30 our strategy and progress
32 leading digital strategy
35 our value for clients and candidates
41 our value for employees
46 our value for investors
51 our value for society
59 sustainability basics
68 reporting framework
70 performance
86 risk & opportunity management
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global HR market
According to estimates by Staffing Industry Analysts
(SIA), in 2017, the HR services industry had a global
market size of about € 406 billion, up by 5% compared
to 2016. As one of the global leaders in HR services, we
see it as our responsibility to play an active role in
developing the industry in the long term.
global HR services market 2017
in billions of €
58%
38%
4%
staffing: € 234 billion
executive search: € 18 billion
professionals: € 154 billion
Source: Randstad estimates and 2017 SIA reports
The highly fragmented HR services industry is divided
roughly into three main segments: staffing,
professionals, and executive search. Randstad is
primarily active in the first two. The global staffing
market is worth an estimated € 234 billion, comprising
Randstad's service concepts of Staffing, Inhouse
Services, Recruitment Process Outsourcing (RPO),
Managed Services Programs (MSP), Payrolling,
Outsourcing, Outplacement, and Project-based
solutions, and accounts for around 80% of our revenue.
The global professionals market is worth around
€ 154 billion, and accounts for around 20% of our
revenue. Randstad’s Professionals segment includes
permanent and temporary placement of qualified
professionals and candidates from a wide range of
industry backgrounds.
trends and structural
growth drivers in the world
of work
Geographically, Randstad is active in countries
representing over 90% of the global HR services market,
and our strategy has been designed to capitalize on the
structural growth drivers in these markets. Throughout
our markets, we see that global developments are
affecting labor markets, which is leading to an intense
discussion about the future of work. This has also led to
a redefinition of our growth drivers. Randstad currently
identifies five global trends that affect our business and
which provide opportunities for growth: globalization,
technology, demographics, the increasing variety of
work forms, and governance of work.
globalization
Over the past few decades, the world economy has been
characterized by the growing internationalization of
production, finance, trade, and services. Companies are
increasingly operating across the globe, and people
tend to move to countries where they can find the best
jobs to match their skills. Facilitated by the reduction in
trade and transport costs, as well as technological
innovation and the internet, globalization is a driver of
changes in global production patterns. This has a
significant impact on employment, for instance as a
result of the fragmentation of production, tasks and
activities due to global supply chains.
In line with this trend, Randstad ensures that it has global
presence, serving clients around the world and offering
a full range of services. Our global brands, such as
Randstad Sourceright and Monster, provide our
multinational clients with a consistent approach,
ensuring aligned and optimized services irrespective of
geographical location. In addition, Randstad aims to
global market share 2017
Total HR services market: € 406 billion
6%
6%
5%
83%
Randstad
Manpower
Adecco
Rest of the market
Source: Randstad estimates, 2017 Bloomberg consensus and 2017 SIA reports
the world around us.
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the world around us.
serve and influence society at a global level by
conducting research and participating in global forums,
such as the Organisation for Economic Co-operation
and Development (OECD) and the B20.
technology
Technology is fundamentally changing the way we live,
work and relate to each other. New innovations and
startups, as well as big data, are quickly disrupting the
HR services market. In addition, artificial intelligence
and robotics are increasingly taking over jobs that used
to be performed by people. While some jobs will
disappear, new ones will be created. The impact of
technology on the world of work will inevitably be huge,
changing the nature of work and requiring new and
constantly evolving skill sets on the part of workers.
Randstad fully embraces the opportunities offered by
technology and has been accelerating its digital
transformation over the past few years. Particularly, we
aim to leverage the best HR technologies available,
combining these with our traditional added value of
genuine human interaction with clients and candidates.
In addition, we carry out relevant research into the
specific effects of digitalization on the labor market,
contributing to the discussion and influencing policy-
making in this regard. For example, Randstad research
has shown that digitalization is leading to an increasing
global skills gap, which will require intensive reskilling
and upskilling of workers. Randstad is involved in several
projects to address this challenge.
demographics
Aging and declining population growth in the developed
world is leading to a shortage of people with vital skills.
In addition, there is a growing mismatch between the
qualifications, skills and preferences of workers and the
rapidly evolving demands of the labor market. At the
same time, in emerging and developing countries,
changing population dynamics have led to a bulge in the
proportion of the young population entering the labor
market, fueling urbanization and contributing to
international migration.
Randstad supports its clients and candidates in dealing
with this growing mismatch and carries out regular
research into mobility and labor migration trends to stay
ahead of the game. In 2017, Randstad published
its People to Jobs, Jobs to People report, which shows
the importance of labor migration in resolving future
labor shortages. In its quarterly Talent Trends reports,
Randstad Sourceright carries out continuous studies
into the prospects and preferences of talent around the
world, including the younger, digitally native
generation.
variety of work forms
The world of work is constantly changing. In an
increasingly competitive environment, companies need
to be agile and adaptable. As a result, they tend to focus
more on their core activities, increasingly outsourcing
HR activities. Changes in legislation and regulation may
also lead to an increased demand for outsourcing. This
is leading to new and diverse work relationships, from
full-time, part-time, temporary and permanent forms to
contract work, remote working and self-employment.
Companies are looking for a workforce that is
committed yet flexible, while workers increasingly want
to choose for themselves where, when, and how they
work.
As we strive to improve global employment
participation, Randstad has long been an advocate of
enabling a flexible workforce while adequately
protecting workers’ rights in terms of remuneration,
social security and opportunities for growth and
development. Many countries still maintain unjustified
restrictions on flexible work arrangements. As a result,
so-called ‘non-standard’ work forms often lack
structural growth drivers
globalization
demographics
technology
governance
of work
variety of
 work forms
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the world around us.
appropriate and fair regulation, which may also lead to
an unnecessarily large informal labor market. According
to the ‘World Employment and Social Outlook 2017’,
published by the International Labour Office, 60% of
workers globally work without a formal employment
contract and have no form of security in their career, and
of the 40% who do have a formal contract, only 42%
have an open-ended contract. In other words, the
‘standard’ jobs that are currently best regulated are by
no means the standard. This underscores the need for
appropriate regulation of a diversity of work forms. To
promote open, inclusive and future-proof labor markets
and to influence policy-making and legislation at an
international level, Randstad participates in several
platforms and organizations, including the B20
taskforce on employment and education, the
International Labour Organization (ILO), and the World
Employment Confederation (WEC).
governance of work
Governance over the way work is carried out is
exercised through legislation, agreements and
contracts, labor market institutions, and the interaction
between governments, trade unions, employers and
workers. Ideally, good governance leads to a fair and
inclusive world of work that allows for a variety of decent
work relationships, while ensuring adequate
enforcement of laws and regulations and protection of
workers’ rights and social security.
Currently, governments and authorities still tend to
focus on ‘standard’, permanent employment contracts,
while restricting or ignoring many other work forms.
Randstad strongly believes that this needs to change.
Randstad supports employment legislation that caters
to flexible needs and demands on the part of both
employers and employees. At the same time, Randstad
is also in favor of a strong social dialogue (i.e.,
negotiations and consultation between trade unions,
employers and government representatives) and
collective labor agreements in countries where this is
relevant and institutionalized. In other words, the huge
and increasing variety of work forms will need to be
appropriately regulated, as a whole. This requires a level
playing field for all stakeholders and includes providing
for decent work and income, equal opportunities, and
adequate social security on the part of workers.
Randstad aims to play a leading role in achieving the
necessary social innovation worldwide by voicing its
views in influential settings and by taking part in the
dialogue with relevant governments and authorities,
trade unions, and employers’ organizations, both at the
local and international level. As a member of the World
Employment Confederation, Randstad has played an
active role in representing the employment industry at
a global level since 2014. We also made a significant
contribution to the WEC's 2017 manifesto entitled ‘No
future of work without social innovation’.
regulatory environment in
our markets
There are major differences in the levels of legislation
around the globe. In mature staffing markets, temporary
agency work is regulated, with the nature of that
regulation varying from light to heavy. Nationally,
staffing is regulated by general labor law, supplemented
by specific staffing regulations regarding employment
conditions and/or service provision. This is
complemented by collective labor agreements (CLAs)
and industry self-regulation, such as codes of conduct.
ILO convention 181
The global HR services industry is regulated by the
International Labour Organization (ILO) Convention 181
and Recommendation 188 on Private Employment
Agencies. This Convention defines minimum standards
for staffing and recruitment, especially recognizing the
importance of flexibility in the functioning of labor
markets. Since the Convention was adopted in 1997, it
has so far been ratified by 32 countries worldwide, 14 of
which are in Europe. The World Employment
Confederation and ILO are continuously promoting
further ratifications.
agency work directive
A major step forward in the regulation of the European
staffing market was taken in 2008, when the European
Parliament adopted the Agency Work Directive (AWD).
The AWD was subsequently implemented in national
legislation by the European Member States. It defines
and recognizes the role of agency work and aims to
identify and lift unjustified and/or disproportionate
restrictions on temporary agency work, while
safeguarding social rights, equal treatment, and equal
pay of workers.
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the world around us.
update on regulatory changes and
developments 2017
In 2017, the most relevant developments with regard to
regulation in our markets took place in France, the
Netherlands, Germany, and Japan.
france
Labor market reform in France was announced on
August 31, 2017. Based on decrees, this general labor
reform aims to foster greater flexibility and
simplification. There are three main points that could
have an impact on the staffing industry: (1) contract
duration and renewal of short-term and flex contracts
may need to be negotiated with unions at sector level;
(2) in the event of financial difficulties, there will be
greater flexibility for companies to negotiate with unions
regarding work time, salaries and geographical mobility;
and (3) the ‘CDI de chantier’ will enable an open-ended
contract that ends upon completion of a project.
the netherlands
In the Netherlands, the enforcement of an Act that aims
to reduce fraudulent contractor status (DBA Act) has
been further postponed until summer 2018. The DBA Act
was supposed to replace the Declaration of
Independent Contractor Status (VAR), a standard
contract required for all independent contractors in the
Netherlands. The Dutch government intends to come up
with new additional legislation, expected to come into
effect by 2020. In addition, the Dutch industry
association for private employment agencies (ABU) and
the trade unions have concluded a new generally
binding staffing CLA. This agreement, which runs from
November 5, 2017 to May 31, 2019, focuses on equal user
pay, and requires staffing companies to provide
information to flexworkers on labor terms and
conditions. In the meantime, the industry federations
ABU and NBBU are still in the process of harmonizing two
sectoral collective labor agreements into one CLA.
germany
The reform of Germany’s temporary agency work
legislation has now been adopted by the German
Bundestag and Bundesrat (effective as of April 1, 2017).
The main points of the reform include the introduction
of equal pay after nine months in an assignment, and a
maximum length of assignments of 18 months
(compared to 24 months previously). Given the
importance of the German staffing market at Group
level, we will closely monitor the legislative situation. We
expect any potential impact on our results to be limited.
japan
In Japan, overtime regulations will soon come into effect
that will benefit dispatch workers. As of April 2018, after
five years of work, workers will have the right to become
a full-time worker with an open-ended contract. As of
September 2018, they will have the right to become a
full-time worker with an open-ended contract after three
years of working in the same department. And from 2019
onwards, dispatch workers in Japan will be entitled to
equal work and equal pay, working time that is limited
to 720 hours per year, 50% paid vacation, and paid leave
for taking care of an elderly dependent.
state of play on staffing regulation and trends, 2017
country1
regulation
regulatory trend
Argentina
restrictive/not specific
unchanged
Australia
appropriate/liberal
unchanged
Austria
workable/to be improved
unchanged
Belgium
workable/to be improved
unchanged
Brazil
restrictive/not specific
unchanged
Canada
appropriate/liberal
unchanged
China
workable/to be improved
unchanged
Czech Republic
restrictive/not specific
unchanged
Denmark
appropriate/liberal
unchanged
France
workable/to be improved
improved
Germany
workable/to be improved
reversed
Greece
workable/to be improved
unchanged
Hungary
workable/to be improved
unchanged
India
restrictive/not specific
unchanged
Italy
workable/to be improved
unchanged
Japan
workable/to be improved
improved
Luxembourg
restrictive/not specific
unchanged
Mexico
workable/to be improved
unchanged
Netherlands
appropriate/liberal
improved
New Zealand
appropriate/liberal
unchanged
Poland
restrictive/not specific
unchanged
Portugal
workable/to be improved
unchanged
Spain
restrictive/not specific
unchanged
Sweden
workable/to be improved
unchanged
Switzerland
appropriate/liberal
unchanged
Turkey
workable/to be improved
unchanged
UK
appropriate/liberal
unchanged
US
appropriate/liberal
unchanged
1 Main market
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the world around us.
key material matters
To identify key material matters in the dynamic world of
work, we take input from both inside and outside
Randstad. In 2016, we had a materiality analysis
conducted by independent consultants in order to
validate our sustainability framework, involving almost
8,000 stakeholders. The stakeholder groups included
clients, candidates, employees, suppliers, authorities,
investors, the financial sector, trade unions, civil society,
and sector organizations. The analysis encompassed
desk research, interviews with internal stakeholders,
client and candidate surveys, and the Great People
Survey for corporate employees. Based on a ranking of
the stakeholders (their power to influence, the urgency
of issues they deemed important, and the legitimacy of
their interests) and an extensive analysis of all data
generated during the process, we identified 27 key
material matters in the social, economic, and
environmental domains. These matters are captured in
a materiality matrix, which has been adopted by the
Executive Board. The materiality matrix was compiled of
overall results for each stakeholder group globally and
therefore does not reflect regional or cultural
differences. In 2018, we will again conduct a similar
materiality analysis.
materiality matrix
legislation and regulation
health and safety
management
economic and social impact 
of labor on society
training and education
business principles and 
human rights
performance and risk management
stakeholder engagement
increase of labor market 
flexibility and mobility 
CRM
innovation management
talent attraction and 
staﬀ retention
corporate citizenship
labor management relations
reputation management
employee engagement
customer protection
corporate governance
sustainable supply chain management
environmental impact of the company
environmental policy
employment security
investing in emerging markets
product and service
responsibility
climate change
social reporting
environmental reporting
competitiveness
of the company
importance to stakeholders
impact on randstad’s business
high
high
low
low
The top 20 materialities and their location in this report:
1 Business principles and human rights - page 59/60
2 Training and education - page 55/56
3 Increase of labor market flexibility and mobility - page 25
4 Economic & social impact of labor on society - page 24
5 Stakeholder engagement - page 28
6 Performance & risk management - page 70/87
7 Legislation & regulation - page 26
8 Health & safety management - page 54
9 Client relationship management (CRM) - page 38
10 Innovation management - page 32
11 Talent attraction & staff retention - page 41
12 Customer protection - page 35
13 Competitiveness of the company - page 24
14 Employee engagement - page 44
15 Reputation management - page 39
16 Labor management relations - page 51
17 Corporate citizenship - page 56
18 Corporate governance - page 119
19 Sustainable supply chain management - page 63
20 Environmental impact of the company - page 63
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our strategy and progress.
our strategy
Over the past few years, Randstad has been
transforming itself from a traditional staffing company
to a data-driven HR services provider. We have
strengthened our digital foundation through the
acquisitions of RiseSmart and Monster and our Randstad
Innovation Fund investments. Going forward, our
growth path will be mainly organic, supported by digital
initiatives, while also expanding the value of Monster for
the entire Randstad Group.
In a largely fragmented global HR services market,
Randstad is currently in an excellent position to drive
growth in the digital HR services space. As a global HR
services company, Randstad already has access to large
amounts of valuable data, and we are adding to this
database constantly. This data ownership, combined
with a high level of investments and our global scale, will
enable us to raise barriers to entry in the HR market.
Our Tech & Touch strategy focuses on a solid
technological and data-driven foundation, combined
with our excellent human touch. We believe that this
approach will differentiate us from our competitors, who
are either tech disruptors such as self-service and digital
platforms, or more traditional HR players with a focus on
talent engagement. Randstad takes an integrated
approach, claiming presence in all areas of the HR
services playing field, from purely digital to specifically
human.
In the coming years, it will be crucial to further
strengthen our solid foundation and integrated
approach. We will need to support our consultants, our
clients, and our candidates in adopting and embracing
digital where this works best, without compromising on
human interaction whenever this adds value. There is a
large untapped market that Randstad can serve, and
while we are learning along the way, we will move
steadily towards our ultimate goal of touching the work
lives of 500 million people by 2030.
strategic roadmap
today
ABFS
org
TTA
talent
tech
M&A
goals
objectives
activity-based field steering
•	driving commercial  
excellence; brand strength, 
leads and conversion
world league people, at the  
right place, at the right time
•	optimized organizational structure
•	high-performance culture & 
people engagement
•	continuous process improvement
total talent architecture, world 
class customer experience
•	creating quantifiable business 
impact addressing the entire 
workforce of our clients
talent management, unique 
candidate engagement
•	optimal integration of  
technology and touch 
•	leader in speed to match  
and quality of hire
•	foster talent engagement  
and communities
HR technology/innovation
•	being the most agile  
integrator of technology  
& services in our industry
•	capturing trends & future  
business in HR technology
M&A, seamless fit 
•	strategic fit
•	value creation
•	manageability
org
•	central sourcing and SME 
approach accelerated by tech
•	global IT SSC progressing and 
expanding focus
ABFS
•	human forward to enhance  
commercial excellence
•	value-based pricing
•	ICR: 40%
TTA
•	inhouse maintains double digit growth (18%)
•	growth in MSP (12%) and RPO (28%)
•	TTA introduced more Randstad services
talent 
•	continuous usage of technology 
in talent management in main 
operations
tech
•	digital factory focus on sales  
match and talent engagement
•	RIF: 2 new investments and 4 follow-ons
M&A
•	acquisition of  
Ausy and BMC
•	leverage ratio  
of 0.9
goals
•	organic growth: +8.7%
•	EBITA margin stable at 4.6%
•	productivity GP/FTE: +3%
financial objectives
•	market share gains
•	grow to 5% - 6% EBITA
•	optimize EVA
•	floor dividend of € 1.62
•	strong focus on shareholder returns 
ultimate goal
•	by 2030, we will touch the work lives  
of 500 million people worldwide
progress 2017
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our strategy and progress.
strategic priorities and
financial objectives
Our strategic objectives and roadmap (see above)
should enable us to capitalize on the structural growth
drivers in our markets.
strategic priorities for the longer term
We apply the following longer-term strategic priorities,
which will support us in realizing our objectives and
maximizing shareholder returns:
• capture profitable growth opportunities;
• continue to use activity-based field steering to drive
operational excellence;
• use dedicated delivery models to target different client
groups;
• develop and roll out our digital strategy in order to
support long-term value creation;
• globally expand the value of RiseSmart and Monster for
the Randstad Group;
• further improve our business mix by a strong focus on
SMEs, professionals and permanent placements;
• focus consistently on an efficient cost structure to
optimize conversion of gross profit into EBITA;
• sustained focus on Days Sales Outstanding (DSO) in
order to maximize our free cash flow (FCF) generation.
financial objectives for the longer term
To further guide this process, we adhere to the following
financial objectives, which are all closely related:
• apply our differentiating Tech & Touch strategy to drive
continuous and profitable market share gains in
expanding markets;
• achieve an EBITA margin of 5% to 6% over time,
through revenue growth, mix improvement, and
efficiency gains;
• optimize our Economic Value Added (EVA);
• maintain a sound financial position, with a leverage
ratio of < 2;
• focus strongly on shareholder returns through the
implementation of a conditional cash floor dividend of
€ 1.62, with optional additional cash returns when the
leverage ratio is < 1.0.
financial objectives and progress in 2017
objective
progress
Continuous profitable
market share gains
In 2017, we continued our track record of profitable market share gains in core markets such as France, Germany,
Belgium, Iberia, and Italy. Overall, we continued to strive for a disciplined pricing policy, driving further profitable
growth in many of our markets.
EBITA margin of 5%-6%
over time
In 2017, our EBITA margin was 4.6%, stable YoY. However, when adjusted for our digital investments (including
Monster), our EBITA margin increased by 20bp to 4.8%. In the longer term, we still believe that a 5%-6% EBITA
margin is feasible, depending on (1) organic revenue trends, (2) pricing climate and mix effects, and (3)
productivity gains, including the effect of digitalization on our traditional business models.
Optimize EVA
Randstad has a long-term track record of creating economic value, disrupted only by the severe macroeconomic
crisis in 2009/2010. This underpins our vulnerability to the economic cycle. Since then, our ROIC has
consistently improved until 2016. The considerable capital deployed to M&A in 2016 temporarily impacted a
further recovery of our ROIC and long-term value creation. Our focus from 2018 onward will therefore be on
further improving our economic returns on the basis of our current footprint. Being an important driver for
optimizing EVA, capital discipline remains a strategic priority.
Leverage ratio of < 2
Our leverage ratio moved up from 0.8 in 2016 to 0.9 in 2017, impacted by acquisitions completed in 2017. This is
still comfortably within the targeted range of < 2. Given our largely organic growth focus going forward and
generally sound free cash flow prospects through the cycle, we aim to remain comfortably below this level going
forward.
Strong focus on
shareholder returns
Given our primarily organically focused Tech & Touch strategy, our strong balance sheet, and a favorable free
cash flow outlook in various economic scenarios, we will adjust our capital allocation strategy. We will implement
a conditional cash floor dividend of € 1.62 per share, with optional additional cash returns when the leverage ratio
is < 1.0.
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Over the past few years, Randstad accelerated its digital
transformation. In 2014, we launched the Randstad
Innovation Fund (RIF), which invests in promising
startups in HR technology. In 2015, Randstad acquired
RiseSmart, a leading outplacement innovator, which
was followed by the acquisition of online recruitment
platform Monster in 2016. At the end of that year, we also
set up our Digital Factory, which focuses on scaling up
the best technologies from both inside and outside the
company as quickly and efficiently as possible
throughout Randstad worldwide. Through our digital
strategy, we embrace a digitalized world of work that will
continue to change fast in decades to come.
staying relevant
The core of Randstad’s digital strategy is to leverage the
best HR technologies available to give our clients,
candidates and consultants access to tools and
solutions that will help them realize their true potential
and make their lives easier. In addition, we aim to help
both clients and candidates stay relevant in a fast-
changing digital world that increasingly requires new
and different skills. In that respect, technology is never
a goal in itself, but always a means to an end. That is why
we focus on combining digital solutions with services
that best fit Randstad’s culture and core values.
agile and lean rollout
approach
Within our Digital Factory, our rollout method is based
on an agile and lean startup approach. Multifunctional
teams work in short development cycles on the basis of
feedback provided by clients and candidates. In this
way, new tech tools and solutions can be quickly
implemented while they are being continuously
improved. As soon as a solution is working well locally,
it is scaled up globally as quickly as possible. A good
example of this ‘think big, start small’ approach is our
self-service Workforce Scheduling tool, which was first
implemented in France, where it was developed further.
It is now being rolled out in Switzerland, Italy, Portugal,
Germany, and the US, and the rest of the world will soon
follow. Other successful tools being implemented
include a video interviewing and assessment solution
and a data-driven sales solution.
balanced mix of global and
local
Randstad’s application landscape is a balanced mix of
best-practice global and local elements. In essence,
digital innovation at Randstad combines external
opportunities identified by RIF with existing local
innovations, which the Digital Factory turns into global
applications. The Digital Factory subsequently helps
local Randstad organizations to implement these global
solutions, ensuring they are adapted to local concepts
and needs, and comply with specific regulatory
environments. Once implemented, global platforms
may again be optimized and extended locally.
digital foundation
Randstad’s digital transformation is built on a firm digital
foundation. First and foremost, digital solutions require
a safe, stable and state-of-the-art IT infrastructure. We
therefore have a global initiative in place to centralize all
our data centers and networks, offering infrastructure in
the public cloud. In addition, we have drawn up a global
master data strategy and a data connectivity strategy.
And as we are fundamentally changing the way we work,
close collaboration with functions such as Finance, HR,
digital strategy
global concepts
• randstad
 sourceright
• global clients 
solutions
tech & touch
local innovations
• randstad direct
• sales navigator
• big data
• horton
external 
innovations
via M&A
• monster
• risesmart
digital factory
scale ups
• data-driven sales
• workforce 
scheduling
• video assessment 
 tools
RIF 
(15 investments)
• pymetrics
• montage
• crunchr
• brazen
leading digital strategy.
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leading digital strategy.
Legal, Marketing & Communications, IT, and Business
Concept Development is also essential.
focus on forward-looking
global services for
enterprise clients
Our largest multinational clients require a uniform,
integrated and global approach in all countries in which
they operate. To meet this demand, a dedicated
Enterprise Clients workstream was established within
the Digital Factory. This workstream brings together
experts from our global concept teams (Randstad
Global Client Solutions and Randstad Sourceright) and
the Digital Factory, to jointly work on bringing new
digital initiatives from the space of HR tech to our
enterprise clients. The new workstream harnesses the
full spectrum of data that is in Randstad’s global data
lake, as well as investing in external data. New forward-
thinking and customized solutions are co-created in
cross functional teams together with our enterprise
clients. These range from leveraging twago technology
and building new freelancer management platforms to
creating workforce strategy toolkits that tap into data
analytics to accelerate our clients’ workforce
optimization in the long term.
monster
The main rationale for acquiring Monster in 2016 was to
accelerate the digitalization of our business models and
to enhance the access to talent in increasingly scarce
labor markets. In 2017, we primarily focused on
improving the performance of Monster by means of
various management leadership changes, a much more
focused product offering, and a revamped go-to-market
strategy. In addition, a comprehensive cost optimization
program was implemented. In 2018, we will continue to
focus on these initiatives. At the same time, Randstad
and Monster are working on multiple initiatives to drive
innovation across a range of digitally enabled products,
services, and marketing initiatives.
tech solutions across our matching process
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leading digital strategy.
randstad innovation fund
(RIF)
RIF is a strategic corporate venture fund that invests in
promising HR technologies in order to be at the forefront
of game-changing technology and build up expertise.
Over the years, RIF has proactively tracked more than
2,500 early- to expansion-stage HR technology players
and emerging technologies. We invest in HR technology
that allows us to make better use of our data and to
streamline the candidate journey for both companies
and candidates themselves. Through RIF, we also bring
the innovators to Randstad, enabling them to work and
learn together. In collaboration with these players, RIF
develops best practices and advises local Randstad
organizations on how to best integrate new
technologies.
Over the past few years, RIF has made a substantial
number of investments, covering the entire HR
technology landscape. In August 2017, in close
collaboration with the Digital Factory, RIF completed its
investment in Montage, Randstad’s supplier of choice
for Video Interviewing & Digital Assessments (VIDA).
By taking minority participations in these companies,
with a focus on online platforms, big data analytics,
machine learning, and sourcing, screening and
selection tools, Randstad is able to complement its own
offering and fuel innovation, supporting our ambition to
be a thought leader in our field. Our investments, which
result in close partnerships with the companies
involved, give us unique access to innovative
technologies and a better understanding of key drivers.
At the same time, the companies in our RIF portfolio
benefit from having access to Randstad’s extensive
network.
After four years, RIF has reached a stage of maturity. We
have built up in-depth knowledge of the technologies
available and the value they deliver. As a result, we are
now also in a good position to advise clients looking to
invest in their own HR tools. We will continue to invest
in promising startups and technologies.
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At Randstad, we play a key role in managing our clients’
key assets: their people. By partnering with Randstad,
our clients can focus on their core business, while we
bring them the best candidates for their permanent,
temporary and interim vacancies. And with our
guidance and expertise, we help candidates develop
throughout their careers. Our technology and data-
driven insights make the matching process simple and
efficient, creating the best possible user experience.
Our four strategic building blocks relate directly to
creating value for our clients and candidates. Three of
them, ‘strong concepts’, ‘excellent execution’ and
‘superior brands’, are discussed below, while the ‘best
people’ building block is discussed in ‘our value for
employees’.
strong concepts
We offer a range of strong concepts: staffing, inhouse
services, professionals, payroll services, MSP & RPO,
outsourcing, outplacement and project-based
solutions. Within all these concepts, we also offer
training and career development opportunities for our
candidates at all levels. This makes the connection
between client and candidate even stronger, also in the
longer term. Our strong concepts are well-known for the
consistency and quality of their delivery, can be rapidly
replicated and leveraged in other markets, and are
relatively easy to adapt to meet specific needs.
staffing
Staffing is our largest business and covers both
temporary staffing, where we charge our clients based
on the hours worked, and permanent placements,
where we charge our clients a fee based on the
candidate’s salary. Our staffing service offering includes
a range of specialties, with dedicated units that focus on
staffing for certain market segments that require
specific skills or experience. All our staffing consultants
are experts in their local labor market, as well as in their
clients’ businesses. For larger customers, we have
dedicated delivery models to maximize results and
client satisfaction.
inhouse services
Randstad’s inhouse services concept specifically meets
the needs of companies requiring large-volume
workforces with client-specific skill sets. Our dedicated
consultants work on-site, using processes tailored to our
clients’ needs. By providing flexible work solutions
designed exclusively for each client, we help our clients
improve labor flexibility and productivity, as well as
achieve cost savings, increased employee retention,
and stronger employee engagement. Segments served
in this way include fast-moving consumer goods
(FMCG), automotive, life sciences, contact centers,
manufacturing and logistics, as well as the
administrative and professionals segments. We also
offer permanent placements at our inhouse locations.
our value for clients and candidates.
We help our clients to find the best talent
with the most relevant skills for their
business. Our technological expertise,
combined with our human touch,
enables us to focus on our clients’
business needs by providing tailor-
made solutions and the best personal
advice.
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our value for clients and candidates.
professionals
As part of this concept, we source experienced
professionals and executives across a wide range of
sectors and disciplines, including engineering, IT,
finance, healthcare, HR, education, legal, and marketing
& communications. Our experienced consultants are
experts in their own specific fields, and have well-
developed social networks. They place candidates on a
temporary or interim basis, as well as in permanent
positions. Clients using these services range from blue-
chip multinationals and consulting firms to
governments and SMEs. We also offer executive search
services (e.g., through Yacht and BMC).
payrolling and broker services
Our payroll services take over the administrative burden
of our clients, so that they can focus on their core
business. We provide a broad range of services,
including personnel administration, payroll accounting,
contract management and broker services for
independent contractors; monitoring and addressing
absenteeism; and a 24/7 portal that enables clients to
register new employees, make changes, or find specific
management information.
MSP & RPO
Our Managed Services Programs (MSP) and
Recruitment Process Outsourcing (RPO) services are
provided by Randstad Sourceright, which is one of our
global businesses. Randstad Sourceright regularly
works across borders to serve large, multinational
organizations looking for added value through
innovative sourcing services, employer branding, HR
technology and analytics. Through MSP, we take
primary responsibility for the organization and
management of a client’s contingent workforce. On
behalf of our clients, we manage the entire supply chain
of all staffing providers. This gives clients greater control
of their recruitment activities and greater transparency
regarding their spending. This is particularly valuable
when clients are dealing with large volumes of
professional skills from many different suppliers. Our
RPO services take control of our clients' recruitment and
talent acquisition process to strengthen their
permanent workforce and reduce their administrative
burden and costs. We provide tailor-made, own-
branded, and on-site HR services to manage vacancies,
screening and assessment.
outsourcing
We manage several outsourcing activities for our
clients, with output responsibility. Our focus areas
within this concept are IT, production/logistics, and
administrative environments.
consultancy and project-based solutions
Our consultancy services and project-based solutions
focus on high-added-value solutions in the IT and
engineering space. We offer these services under a
statement of work (SOW) in the higher-level
professionals segment. In Europe, these services are
mainly provided by Ausy.
outplacement
Our outplacement services are mainly provided by our
global business RiseSmart. We advise and support
We help candidates in finding jobs and
developing their skills so they can have
a meaningful career. Our data-driven
insights enable us to quickly identify
smart career opportunities and make
the perfect match. Candidates are
personally guided to short- and long-
term career success.
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our value for clients and candidates.
organizations in situations in which employment
contracts need to be terminated for strategic or other
reasons. We help employees to find suitable new
employment, and try to make the transition as smooth
as possible. RiseSmart works on the basis of a unique
cloud-based technology platform with a proprietary
matching engine.
In the overview below, we visualize how Randstad
supports its clients at all levels by providing a wide
variety of services.
our client offering
for all clients
for enterprise clients
randstad supports clients
senior executives
management & 
professionals
white-collar
blue-collar
HR strategy
strategic workforce planning  & HR consultancy
managed services programs
professionals
inhouse services
staﬀing
interim mgmt
outsourcing
consultancy & projects
recruitment process outsourcing
executive search
permanent professionals 
permanent staﬀing
training & career development
outplacement
payrolling & broker services
contingent services
•  supplier management
•  resources
•  services
perm services
•  recruitment
•  search & placement
•  retention & growth
•  exit
payments (contingent & perm)
our promise to candidates: smart, personal
and long-term support
We see each candidate as an individual, not just another
résumé. We understand the importance of a job and a
meaningful career in the lives of our candidates. Our
technology makes the matching process simple and
efficient, creating the best user experience and freeing
up our consultants' time to personally guide their
candidates to short- and long-term career success.
Thanks to our data-driven insights, we are increasingly
able to quickly identify smart career opportunities that
candidates may not even have considered themselves.
Besides finding suitable jobs for our candidates in the
short term, we take pride in following them throughout
their career and, where appropriate, support them in
continuously developing their skills through training and
education. We are also offering training and retraining
opportunities to long-term unemployed workers in
order to increase their chances in the labor market and
tackle specific labor shortages.
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our value for clients and candidates.
excellent execution
The true value of our strong concepts and services relies
on excellent execution. To support our consultants in
their daily work, we have implemented several best
practices and approaches that help them be as effective
as possible in meeting and exceeding the needs and
wishes of clients and candidates. These include activity-
based field steering, Total Talent Architecture,
Integrated Talent Solutions, digital tools and platforms,
and best practices for field and back-office activities.
activity-based field steering (ABFS)
Our ABFS model is designed to optimize adaptability
and to drive productivity and growth. ABFS is an input-
driven field steering model based on end-to-end
measurement. It enables us to adjust to changing
market circumstances quickly. We use our ABFS model
to manage and direct performance across our business.
It drives decisions to exploit profitable growth potential
or to reduce costs when needed, aligned with local
trends and developments. This means we manage on
the basis of real-time, bottom-up figures. Managers
receive weekly reports, covering a range of
performance indicators. The model and performance
tools help managers take quick decisions and translate
them into immediate action.
total talent architecture (TTA)
Total Talent Architecture (TTA) is an approach we use for
our largest clients (approx. 1,000). TTA enables a
company to build a holistic talent strategy and benefit
fully from Randstad’s innovation strategy. A holistic
talent strategy requires an optimum balance in terms of
permanent, contingent and freelance talent. TTA
provides an in-depth analysis of a client's workforce
planning to deliver a talent strategy aligned with growth
ambitions and profitability targets. TTA connects all our
business lines and enables us to increase our presence
in higher-value-added services such as professionals
and permanent placements. Our TTA approach keeps us
agile, as we continuously adjust our delivery models to
serve our clients in the best possible way. As these
models evolve, we share insights and drive strategic
conversations with clients so that they can benefit from
the depth of our service offering, from staffing and
recruitment of professionals through to highly
customized RPO, MSP and digital solutions. Through
TTA, we build long-term, sustainable relationships that
are focused on long-term value creation.
integrated talent solutions
An Integrated Talent Solution is a comprehensive
approach to delivering the right talent in the right modes
of employment. Our solutions encompass all worker
types and sources, including permanent placements,
staffing, freelancers and contractors, SOW consultants,
part-timers, payrollees and seasonal workers.
Depending on the client’s requirements, we manage
some or all of these workers by integrating our supply
models, such as RPO, MSP and payroll services. At the
center of every client program is a comprehensive talent
analytics platform to provide a thorough view of the
client’s workforce, and every program is customized to
the client’s needs, culture and structure.
digital tools and platforms
To support the continuous improvement of our
concepts and to create new delivery models, we
integrate innovative HR technology, such as big data
analytics, social sourcing, talent networks, and cloud
platforms, into our services. The ultimate aim is to
maximize our technological capabilities, so technology
can take over certain basic tasks in our service delivery
to clients, freeing up time for relevant personal contact.
What is more, our data-driven insights enable us to
identify interesting career opportunities for candidates
which they may not even have considered themselves.
Our consultants have access to an increasing number of
digital tools and platforms, including Data-Driven Sales,
Workforce Scheduling, and video interviewing and
digital assessment.
best practices for field and back-office
activities
We make use of standardized front- and back-office
processes and, where possible, marketing processes.
This improves the consistency and quality of our
business and our execution. For our head-office
activities, our way of working is based on lean
management principles and continuous improvement,
ensuring that we deliver our services with the right
quality and at the lowest costs. In addition, we
continuously benchmark our local organizations and
processes, in order to further drive the effectiveness and
efficiency of our head-office activities. In 2017, we
specifically focused on Global IT Solutions, IT data
centers, and global procurement.
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our value for clients and candidates.
superior brands
Our superior brands are a guarantee to our clients that
they will receive the highest quality service and the best
employees worldwide. Superior brands give us better
pricing options and the type of awareness that
accelerates selling and prospecting, as well as
introducing new services. Superior brands also help us
attract, recruit, and retain the best people, while
enhancing our visibility and credibility with regulators
and legislators. In addition, our superior brands
contribute to our good reputation.
Randstad is our main brand in most of our markets. Only
in cases where the market situation makes this beneficial
do we make use of other brand names. This focused,
centralized brand strategy enables us to leverage brand
recognition, generate efficiency benefits for our online
strategy, and share experiences across the company. It
also generates momentum behind our joint sponsorship
initiatives, and we achieve significant cost reductions by
sharing campaign materials, photo databases, and
know-how.
brand image
The level to which our clients and candidates are
engaged with our brand is systematically measured and
benchmarked in all major markets through the annual
Randstad Brand Guidance Survey. Since 2004, this
international survey (formerly the Randstad Brand
Tracker Survey) has been conducted by Kantar TNS,
covering all countries in which Randstad is active. Its
main purpose is to monitor the positions of the Randstad
brands, compared to our competitors and selected
other benchmarks, by measuring awareness,
consideration, preference, recommendation, and the
image of our brands.
In 2017, we added an extra module to the survey,
designed by TNS (Needscope), which enables us to
better assess how the Randstad brand is perceived,
allowing us to offer active guidance to operating
companies in terms of brand position alignment. The
survey now also includes our digital brands, enabling
comparison across the full spectrum of the competitive
landscape as we move further into the digital space.
net promoter score
The Net Promoter Score (NPS) represents the
relationship between Randstad as a company and our
potential and actual candidates and clients. This
indicator compares the number of respondents who
would recommend us to others with the number who
would not. Within our industry, our goal is to have a Top
3 NPS score, which we achieved in the majority of our
key countries in 2017. Several of our operating
companies also monitor client and candidate
satisfaction through bespoke surveys, ISO and other
certification systems, as well as review meetings. This
enables them to not only measure NPS, but also the
drivers behind the scores. In this way, we can
continuously improve satisfaction levels of both clients
and candidates.
thought leadership
As a global leader in HR services, we see it as our
responsibility to take an active role in developing our
industry. Our international reports on the world of work
continue their rapid rise in visibility and popularity. In
addition, many research projects and events take place
on a country level, supporting us and our clients in
making sound business decisions.
randstad workmonitor
One of our key surveys is the Randstad Workmonitor,
which covers 33 countries around the world. Published
four times a year, the Workmonitor reports make both
local and global trends in mobility, job satisfaction and
motivation visible over time. The results are published
on our website.
randstad employer brand research
The international annual Randstad Employer Brand
Research (previously known as the Randstad Award)
investigates what people find attractive in an employer.
It is the most representative and inclusive employer
brand research in the world, and captures the opinion of
the general public between 18 and 65, in 30 countries.
The insights help organizations shape their employer
branding strategy and talent programs. In 2017, the
research was conducted for the 17th time. Participating
countries organize local Randstad Employer Brand
events, engaging key players in the local HR industry
and celebrating the winner of the research as being the
most attractive employer of that country.
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our value for clients and candidates.
randstad sourceright − talent trends report
Randstad Sourceright's Quarterly Talent Trends Reports
are a comprehensive guide to the most important trends
impacting the world of talent, employees, and business.
The reports are based on a global survey of 700 global
HR and talent acquisition leaders from 15 countries. By
capturing the outlook of their peers, the reports enable
HR and talent acquisition leaders to benchmark how
their strategies and execution stack up against fellow
talent leaders. The reports provide best practices for HR
leaders to adapt to talent scarcity challenges, based on
the exploration of global workforce trends and the
opinions of industry thought leaders from across the
talent management space.
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The true value of our business lies in our people. We take
pride in working with the best talent in the industry. We
challenge them to perform to the best of their ability and
seize opportunities to develop their career within
Randstad, both nationally and internationally.
We understand how important it is for people to have a
meaningful job, as well as the opportunity to develop
themselves. It is our passion to ensure our people enjoy
the best work environment, excellent training, exciting
and diverse career opportunities, and all the support
they need to develop to their full potential.
The Human Resources (HR) function at Randstad
focuses on enabling our business performance.
Specifically, in 2017, this meant acting as a change agent
in the (digital) transformation of our organization,
including the use of HR technology. As Randstad is
taking a leading role in the new digital world of HR, at
the crossroads of technology and humanity, it is
essential that our workforce is well-prepared and ready
to embrace new ways of working. Our transformation
requires a shift in mindset and behavior on the part of
our people. This means equipping our people with new
skills and competencies and an ability to continuously
adapt to the changing demand. The HR function enables
this shift by making sure everyone is on board and ready
to enhance their performance.
HR cycle
The way we attract, develop and engage our employees
at Randstad is best visualized through the HR cycle.
selection 
At Randstad, we do not hire people to fill a vacancy, but
we hire people for a career. This is the core of our
Employee Value Proposition (EVP). Randstad aims to
attract agile and adaptable people who are capable of
effectively dealing with and responding to rapidly
changing circumstances and whose values and beliefs
match our own. We have a policy of hiring and
promoting the best person for the job, based on proven
performance and potential assessment. Although we
HR cycle
selection
engagement
reward &
recognition
performance
management
onboarding &
induction
learning &
development
career
advancement
our value for employees.
We are an attractive employer for our
employees by offering continuous
development and career opportunities.
Data-driven insights help our
employees to focus on what really
matters in their job: serving clients and
candidates even better.
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our value for employees.
regularly attract new leaders from outside Randstad to
bring in new expertise and experience when required,
we continue to focus on developing our own employees
to fill our leadership roles internally.
gender equality, inclusion and diversity
Randstad is strongly committed to gender equality,
inclusion and diversity. We believe this helps us build a
more agile, productive, and innovative workforce that
reflects our candidate and client base, and the society
in which we work. We actively support women in
climbing the career ladder at all levels of our
organization. In 2017, Staffing Industry Analysts (SIA)
again named eight Randstad executives in their ‘Global
Power 100 – Women in Staffing’ list. Locally, many
initiatives have been launched to support diversity and
inclusion in the broadest sense. For example, Randstad
is a partner of Workplace Pride, a non-profit foundation
promoting greater acceptance of LGBTI people in the
workplace.
proportion of women in senior leadership positions1,2
% women in organization
% women in senior leadership positions
2017
2016
2017
2016
North America
60%
60%
46%
46%
Netherlands
71%
71%
38%
36%
France
76%
76%
48%
48%
Germany
61%
60%
45%
42%
Belgium & Luxembourg
83%
85%
50%
50%
Iberia
78%
78%
53%
52%
Italy
80%
79%
42%
41%
Other European countries
68%
65%
55%
53%
Rest of the world
59%
58%
44%
42%
Corporate
45%
48%
49%
36%
Total
68%
67%
47%
45%
1 Senior leadership refers to all levels equal to or above district/regional management, including account management or commercial management reporting to a regional
director or higher.
2 The data includes only part of global businesses. The following entities are not yet covered: Monster, Sourceright North America, RiseSmart, and twago.
Source: Great People Survey
composition of our workforce by gender
2016
2017
30%
1%
55%
14%
33%
1%
54%
12%
male full-time
female full-time
male part-time
female part-time
Source: Great People Survey
composition of our workforce by age group
2016
2017
6%
21%
21%
18%
24%
10%
6%
21%
21%
18%
24%
10%
18 - 24
30 - 34
40 - 49
25 - 29
35 - 39
50+
Source: Great People Survey
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our value for employees.
composition of our workforce by type of contract
2016
2017
90%
10%
90%
10%
permanent/open-term contract
fixed-term contract
Source: Great People Survey
onboarding & induction 
All new employees follow a formal induction program in
the first few months, which helps them to become
successful in their new role as quickly as possible. The
program covers our ambitions, strategy, values, culture,
history, and corporate policies, as well as targeted job-
related information. Randstad tracks the effectiveness
of the induction programs by measuring awareness of
our values and policies, time to productivity and other
success metrics. Immediately after the induction period,
an individual development plan is drawn up.
performance management
At Randstad, we see the development of our people as
a shared responsibility. To facilitate our people’s
continuous development and unleash their full
potential, our performance management process is
based on what we call Great Conversations, a program
that was rolled out throughout Randstad in 2017. Besides
regular business and performance reviews, employees
get together with their managers on a regular basis (at
least once a quarter) for a constructive, future-focused
conversation in which they receive feedback and
coaching. The dialogues and goals set in these Great
Conversations are Meaningful, Aspirational and
Progress-based (MAP). They do not just focus on
numbers and output, but also on people’s development
areas and ambitions, and are meant to empower
employees rather than ‘rate’ them. Randstad HR
supports people in developing and practicing
techniques and skills to ask for, receive and apply
ongoing feedback and coaching. Our Great
Conversations also provide the input for Reward &
Recognition and Learning & Development.
reward & recognition
At Randstad, we aim to provide our employees with
meaningful rewards and fair remuneration in order to
strengthen their ties with the company, while
encouraging outperformance. Remuneration is based
on real outcomes, which are assessed regularly. This
includes behavior and development. In addition, our
annual remuneration process also takes external market
developments into account. To encourage our
corporate employees’ affiliation with Randstad and to
enable them to participate in Randstad’s success, an
employee share purchase plan is in place, with currently
over 11,000 active participants. For our senior
leadership, a long-term incentive plan is in place,
including a performance share plan. The purpose of this
plan is to retain our best people and to drive and reward
sustained performance of our company by sharing in
success.
learning & development 
In our training programs, we combine different forms of
learning, including e-learning and gamification. Our
programs are always competency-based and focus on
leadership, sales, job-related and soft skills. They are
offered at all levels within the organization. For field
positions, we have dedicated training programs
focusing on operational skills and specific knowledge
required for the job. In addition, our e-learning platforms
offer world-class courses, covering a wide range of
topics.
Randstad offers programs on a local, regional and global
level. Locally, programs are developed by the operating
companies, sometimes in collaboration with business
schools. Regionally and globally, the Frits
Goldschmeding Academy offers state-of-the-art
leadership programs, which are created in cooperation
with leading global business schools and partners, such
as London Business School, TIAS, INSEAD, IMD, SMU,
and Stand & Deliver Group. Our Executive Board and
senior leaders are closely involved in the development
and delivery of the programs. In 2017, the Frits
Goldschmeding Academy trained 359 senior leaders in
10 different development programs.
In 2017, the Frits Goldschmeding Academy redesigned
its offering to better support Randstad’s transformation
and to encourage more efficient exchanges of best
practices at a global level. The Frits Goldschmeding
Academy increasingly focuses on strategic
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transformational leadership programs. Through clear
design principles, a more integrated approach, and
alignment within and across programs, we aim to
achieve a higher return on investment, as well as
ensuring that all countries have access to top leadership
programs.
Randstad’s World League Programs are designed to
develop our functional communities (Finance, Legal,
HR, Marketing & Communications, and IT). These global
programs focus on specific skills, knowledge and
behaviors within each function, enabling the functional
communities to deal with performance and
development in an aligned and constructive way.
Experiential learning on the job is one of the most
effective learning strategies. Randstad maximizes this
learning style by giving people stretching assignments,
while providing sufficient coaching and mentoring at all
levels. Stretching assignments, such as temporary
projects in a different business, encourage growth and
development by placing people out of their comfort
zone. In addition, we use a 360-degree feedback
process to continuously monitor the organizational
climate, leadership styles and competencies.
career advancement 
Randstad recognizes the importance of talent
management as one of the key factors underpinning
company growth and ensuring the continuity of our
business. Talent management enables us to attract and
retain high-caliber people, identify and develop our
talents, and continuously anticipate needs for future
positions on a local and global level. Our annual People
Review Process is the basis of our leadership and talent
management approach. It addresses the performance
and potential of all employees on an individual level.
Randstad’s senior leadership takes a keen interest in the
company’s strategic workforce planning, focusing on
development needs, succession plans, pipeline
development, and future leadership talents.
As a company with a global footprint, we require our
local leaders to operate effectively and comfortably in a
global environment. Randstad provides ample
opportunities for employees to further develop their
leadership skills, to acquire and build a global mindset,
and to effectively manage and leverage cultural
differences. For employees working in an international
environment, our Intercultural Management Program
provides special training in personal effectiveness in
such an international setting.
engagement 
By continuously engaging our people, we encourage
innovation, accountability, and business
outperformance. Once a year, we monitor our progress
through our Great People Survey. This survey measures
our people’s general feeling of empowerment and
engagement, as well as how they view our leadership
and organizational capabilities. Through the survey, we
identify areas where there is room for improvement, so
we can champion positive change. We encourage our
managers to share results and action plans with their
teams, creating a sense of shared ownership. By making
Randstad an even better place to work, we drive
outperformance and increase our overall success.
In 2017, the participation rate of the Great People Survey
went up to 87% (2016: 82%). In addition, of all
respondents, 68% agree or strongly agree with the
statement that Randstad is an outperforming
organization, resulting in an outperformance score that
equals the Service Provider Benchmark.
The survey revealed that our employees particularly
appreciate the opportunity of working towards clear
randstad outperformance by geography 1
as % of total number of respondents
outperformance
score
benchmark
2017
2016
2017
2016
North America2
77%
76%
70%
70%
Netherlands
69%
65%
70%
70%
France
64%
61%
58%
58%
Germany
66%
66%
63%
63%
Belgium & Luxembourg3
72%
64%
61%
61%
Iberia4
75%
73%
66%
66%
Italy
60%
58%
59%
59%
Other European countries
69%
68%
n.a.
n.a.
Rest of the world
61%
61%
n.a.
n.a.
Corporate
77%
76%
n.a.
n.a.
68%
67%
68%
68%
1 The data includes only part of global businesses. The following entities are not yet
covered: Monster, Sourceright North America, RiseSmart, and twago.
2 Benchmark only available for the USA.
3 Benchmark only available for Belgium.
4 Benchmark only available for Spain.
Source: Great People Survey
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our value for employees.
goals within their teams, that they are proud to work at
Randstad, and that they have confidence in their
immediate manager. Nevertheless, giving and receiving
feedback is still one of the most important topics we
need to pay more attention to. Although we increased
our score compared to last year, there is still room for
improvement in this area. We are confident that Great
Conversations will be able to play an important role in
improving this aspect. In addition, the survey revealed
that, as a company, we need to be more decisive in
taking action quickly when this is necessary, and that we
could increase our efficiency. To tackle this, we aim to
move to a new method involving more frequently
measuring engagement, combined with a dashboard
with real-time and more actionable results.
employee retention rate
in % of total number of employees
2017
2016
Employees staying with their operating company
76.6%
75.7%
Employees transferred within the Group
0.3%
0.4%
76.9%
76.1%
employee participation
Randstad actively promotes employee participation
through a network of national works councils and
dialogue with trade union representatives. Managers
and employees across Randstad discuss work- and HR-
related issues in accordance with national law and
practices. The results of these dialogues are also fed into
Randstad’s European Works Council, which meets on a
regular basis to discuss the company’s results and
strategy, HR issues and any other information relevant
to our employees and operating companies. UNI-
Europa, the representative trade union federation for
services in Europe, is invited to attend the European
Works Council meetings as an observer.
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financial strategy
Our financial strategy and ambitions ensure long-term
value creation for our investors, ultimately leading to
maximized shareholder returns over time. As such, we
aim to optimize our Return On Invested Capital (ROIC),
driven by a disciplined capital allocation strategy. Our
differentiating Tech & Touch strategy will be primarily
focused on organic growth, complemented by selective
M&A activity. Our sustained focus on Days Sales
Outstanding (DSO) ensures an optimal conversion of
EBITA into free cash flow (FCF).
capital allocation strategy
Given our primarily organically focused Tech & Touch
strategy going forward, our strong balance sheet, and
favorable FCF outlook in various economic scenarios,
we will adjust our capital allocation strategy. This
amendment will be twofold. First, we will change our
dividend policy by implementing a conditional cash
floor dividend of € 1.62 per share (based on the average
dividend per share (DPS) of 2014, 2015 and 2016). This
baseline dividend level will be maintained even when
the general 40-50% payout ratio is temporarily
exceeded, barring (i) seriously adverse economic
conditions, (ii) material strategic changes to the sector
and (iii) a material deterioration in our solvency &
liquidity ratios. Second, we will introduce optional
additional cash returns in the event of a leverage ratio
below 1.0 through (i) a special dividend (preferred) or (ii)
share buybacks.
investor relations
Randstad Investor Relations' main goal is to safeguard
our 'financial brand'. Whereas clients and candidates
recognize the Randstad brand for its reliability and
service quality, investors and analysts should recognize
our brand for its open and transparent communication.
Our aim is to be best in class in terms of disclosure and
to provide insight into the strategic direction of the
business. These efforts should enable an accurate
valuation of the Randstad share over time.
investor relations policy
We maintain an active, open, and transparent dialogue
with existing and potential shareholders, as well as with
analysts and banks. We organize roadshows, attend
investor conferences, and accommodate meeting
requests wherever feasible, as well as adhering to all
legal obligations relating to confidentiality.
We are committed to providing high-quality and timely
information to all stakeholders, while at the same time
ensuring that the entire market has access to such
information (including price-sensitive data). Our policy
is that, whenever possible, we make a member of the
Executive Board and/or a representative of the Investor
Relations department available to meet with investors.
From time to time, we also involve country management
and facilitate field trips (including online).
Bilateral meetings and conference calls with analysts
and actual or potential shareholders will not be held
during 'closed periods', which normally run from the end
of a quarter until publication date. Our policy of holding
bilateral meetings with shareholders is set out in the
corporate governance section on our website.
dialogue with investors, analysts, and other
stakeholders
We maintain an active dialogue with investors, analysts,
and other stakeholders. Each quarter, Randstad
organizes a conference call to discuss the latest results.
These events are broadcast online. In addition, we hold
events to inform the markets on our business. In 2017,
we organized a well-attended Capital Markets Day in
our value for investors.
Our strategy and ambitions ensure long-
term value creation for our investors.
We aim to optimize shareholder return
over time.
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London, providing an in-depth view on our digital
strategy, as well as highlighting our operational
performance, Group strategy, and outlook.
In 2017, we hosted over 40 roadshows and equity
investor conferences, spending in total more than 60
days on investor communications. We met with
investors in Belgium, Canada, France, Germany, Hong
Kong, Italy, Ireland, Japan, the Nordics, Singapore,
Spain, Switzerland, the Netherlands, the UK, and the US.
In addition, a large number of investor meetings were
held at our head office in the Netherlands.
On March 30, 2017, we held our Annual General Meeting
(AGM) of Shareholders. More information on the AGM,
including key decisions and attendance, can be found
in the section 'report of the supervisory board'.
capital structure
Invested capital amounted to € 5.3 billion, and we
achieved return on invested capital of 16.7%, up from
15.9% last year. More information on and an analysis of
invested capital can be found in the section 'financial
performance'.
invested capital
2017
2016
Net debt
1,025.7
793.4
Total equity
4,251.7
4,140.8
5,277.4
4,934.2
Return on invested capital
16.7%
15.9%
debt
Our financing policy aims to secure financing that
matches the mid- to long-term financing requirements
of the Group. The increase in working capital
requirements in 2017 was primarily related to funding
our accelerating organic sales growth, while our DSO
was adversely impacted by M&A and mix effects. Our
leverage ratio (net debt/12-month EBITDA) remained
largely stable at 0.9 (2016: 0.8), despite significant cash
outflow in 2017 due to acquisitions announced in 2016.
The leverage ratio is still well within our targeted range
of between 0 and 2. We consider being within this range
important for continuity. We maintained our policy of
using floating interest rates. We believe this adds value
for shareholders in the long term, as over time floating
interest rates are on average significantly lower than
fixed interest rates. Also, our policy of using floating
interest rates, provides a natural hedge against the
development of operational results, which continued to
pay off significantly during 2017.
debt
2017
2016
Total debt facility
1,850.0
1,920.0
Net debt
1,025.7
793.4
Leverage ratio
0.9
0.8
total equity
In 2017, the number of issued and outstanding ordinary
shares remained virtually stable compared to 2016 at
183 million.
We offset the dilutive effect from our annual
performance share plans for senior management
through share buy backs. The next allocation of shares
will take place on February 13, 2018. The number of
Randstad shares we purchased during the period
between October 25, 2017 and February 12, 2018 was
0.7 million.
total equity
numbers year-end
(in millions)
nominal value
per share
2017
2016
Ordinary shares
183.3
183.0
€ 0.10
Preference shares B
25.2
25.2
€ 0.10
Preference shares C
50.1
50.1
€ 0.10
Total number of shares
258.6
258.3
€ 0.10
On March 30, 2017 the Annual General Meeting of
Shareholders approved a proposal to pay a cash
dividend of € 1.89 per ordinary share.
On December 31, 2017, there were 50.1 million
preference shares C in issue. The dividend yield on these
shares is 5.8%. For preference shares B, there were
25.2 million shares in issue, with a dividend yield of 2.7%.
We consider preference shares to be an attractive part
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of equity. It provides fully committed long-term capital
at relatively low cost.
voting rights on shares
The ordinary shares have equal voting rights (one share,
one vote). The voting rights on the preference shares B
and C are aligned with the historical capital contribution.
This means that there are 3.6 million voting rights on
preference shares B and 5.6 million voting rights on
preference shares C.
listing and indices
Randstad Holding is publicly listed on Euronext
Amsterdam (ticker symbol RAND.AS), where Randstad
shares and options can be traded. Randstad shares are
also included in a number of other indices, such as
Euronext 100, Dow Jones Stoxx Europe Sustainability,
Dow Jones Sustainability World Index, Euronext Vigeo
Benelux 20, and the Euronext Vigeo Eurozone 120.
Inclusion in major indices is important, because it
improves visibility and liquidity.
indicative free float
Randstad's free float amounts to approximately 60%.
The majority of the free float of ordinary shares is held
outside the Netherlands. We actively pursue an
international spread, reflected by 50% of shares held by
Anglo-Saxon investors (2016: 52%). We estimate that in
total approximately 84% of our ordinary shares are held
by institutional investors, while retail investors hold
around 9%.
indicative geographic spread of ordinary shares
(free float)
2017
36%
10%
21%
9%
19%
5%
north america
united kingdom
other european countries
netherlands
france
rest of the world
major shareholders
A list of our major shareholders can be found in the
report of the Supervisory Board under 'legal
transparency obligations'.
Growth investors overtook value investors as the largest
holders of Randstad shares, comprising 25% of the free
float. Value-focused investors own 23% of the ordinary
shares, with the remainder being held by alternative,
index, and yield investors.
liquidity
The number of shares traded has risen substantially over
the years, from 86 million in 2005 (mainly on Euronext)
to about 490 million in 2017 on various trading
platforms, but mainly on Euronext. Velocity (measured
as the total number of shares traded divided by the
average number of shares outstanding) was down
slightly compared to 2016. Our velocity level implies that
the average holding period is around four to six months
for the total number of outstanding shares, or
approximately two to four months for the free float.
share volume traded and velocity1
volume traded (in millions)
velocity (%)
2013
2014
2015
2016
2017
300
400
500
600
300%
350%
400%
450%
500%
550%
600%
1 Numbers of previous years were restated to include OTC (Over the Counter
Trades).
dividend policy on ordinary shares
We aim for a payout ratio of 40% to 50% of net profit
adjusted for amortization and impairment of acquisition-
related intangible assets and goodwill, integration
costs, and one-offs. Additionally, we have implemented
a conditional cash floor dividend of € 1.62 per share. This
baseline dividend level will be maintained even when
the general 40-50% payout ratio is temporarily
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exceeded, barring (i) seriously adverse economic
conditions, (ii) material strategic changes to the sector
and (iii) a material deterioration in our solvency &
liquidity ratios.
In 2017, we further enhanced our financial position. Our
business showed sustained growth throughout the year,
and we improved our underlying earnings. As a result,
we will propose to our shareholders an all-time high cash
dividend of € 2.76 per ordinary share for 2017, up 46%
year-on-year. This consists of a regular dividend of
€ 2.07 (2016: € 1.89), representing a payout of 50% of
the basic underlying EPS. In addition, we propose a
special cash dividend of € 0.69 per ordinary share, given
our year-end 2017 leverage ratio of 0.9 and our new
capital allocation strategy immediately applied to FY
2017.
The ex-dividend date for the regular dividend will be
March 29, 2018. The number of shares entitled to the
regular dividend will be determined on April 3, 2018
(record date). The payment of the regular cash dividend
will take place on April 5, 2018.The payment of the
special cash dividend will take place in Q3 2018, on a
specific date to be determined by the Executive Board
and to be announced on the Randstad website.
We are also proposing a dividend payment on
preference shares B and C of € 12.6 million.
per share data
2017
2016
2015
2014
2013
Dividend (€)
2.76
1.89
1.68
1.29
0.95
Dividend yield (%)
5.4
3.7
2.9
3.2
2.0
Payout (%)
67
50
50
50
45
Basic EPS (€)1
4.13
3.77
3.35
2.57
2.09
Diluted EPS (€)1
4.11
3.75
3.32
2.54
2.07
EBITA (€)2
5.82
5.18
4.74
3.92
3.26
Free cash flow (€)
3.20
2.54
2.75
2.66
1.65
Equity (€)
23.22
22.66
21.25
18.28
16.40
1 Before amortization and impairment of acquisition-related intangible assets and
goodwill, badwill (2013 only), integration costs and one-offs.
2 Underlying.
share performance
share price development
The share price ended the year 2017 at € 51.24, which
was virtually flat versus the 2016 closing price of € 51.53.
In April, a dividend of € 1.89 per ordinary share was paid
out. As a result, the total shareholder return (TSR) for
2017 was 3%. In August, the share price reached a low
point of € 48.38, ultimately ending the year at € 51.24.
share price development
in millions of €, unless otherwise indicated
2017
2016
2015
2014
2013
Closing price (€)
51.24
51.53
57.53
40.06
47.15
TSR (%)
3
(8)
47
(12)
74
High (€)
57.51
57.53
64.92
49.54
47.15
Low (€)
48.38
32.58
38.37
31.40
27.81
P/E ratio
12.4
13.7
17.3
15.8
22.8
EV/Sales
0.45
0.49
0.56
0.44
0.55
Market
capitalization
9,390.4
9,431.2 10,529.1
7,215.2 8,366.0
Enterprise value
10,416.1 10,224.6 10,702.3 7,637.2 9,127.0
share price development 2017 of randstad ordinary
shares compared to euronext AEX index and peers
80
90
150
140
130
120
110
100
J
F
M
A
M
J
J
A
S
O
N
D
manpower
randstad
adecco
AEX
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share price development 2017 of randstad ordinary
shares
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
€ 58
€ 48
€ 50
€ 52
€ 54
€ 56
volume (x 1,000)
share price movements (€)
J
F
M
A
M
J
J
A
S
O
N
D
2
1
3
4
5
6
1 february 14, 2017 – Q4 and full year 2016
2 april 3, 2017 – ex-dividend
3 april 25, 2017 – Q1 results
4 july 25, 2017 – Q2 results
5 october 24, 2017 – Q3 results
6 november 21, 2017 – capital markets day
analyst recommendations
Approximately 15 financial analysts regularly publish
reports on Randstad. At the end of 2017, around 50% had
a 'buy' rating, while 44% of analysts recommended
holding on to our shares; one analyst had a 'sell' rating.
On December 31, 2017, the average target share price –
according to analyst consensus – was around € 58. The
highest target price was € 68, and the lowest was € 42.
earnings per share reporting
Randstad reports earnings per share on a fully diluted
basis. We focus on earnings per share before
amortization and impairment of acquisition-related
intangible assets and goodwill, integration costs, and
one-offs. In our view, this gives the best reflection of
underlying business performance.
diluted earnings per share1
2017
2016
2015
2014
2013
Q1
€ 0.81
€ 0.67
€ 0.50
€ 0.45
€ 0.33
Q2
€ 0.98
€ 0.93
€ 0.83
€ 0.64
€ 0.51
Q3
€ 1.10
€ 1.05
€ 0.93
€ 0.77
€ 0.65
Q4
€ 1.22
€ 1.10
€ 1.05
€ 0.68
€ 0.58
Full year
€ 4.11
€ 3.75
€ 3.32
€ 2.54
€ 2.07
1 Before amortization and impairment of acquisition-related intangible assets and
goodwill, badwill (2013 only), integration costs, and one-offs.
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Randstad aims to make a positive contribution to society
through industry involvement, research, surveys and
publications, memberships, sponsorships, and events,
and a comprehensive approach to Corporate Social
Responsibility (CSR).
industry involvement
We strongly believe that social dialogue and active
participation in industry bodies will help produce clear,
fair, and workable regulations in the markets in which we
operate. By investing in strong industry federations – on
a national, regional, and global level – we believe we can
contribute to the future development of the HR services
industry. The overview ‘highest randstad positions in
industry associations’ shows Randstad’s participation in
staffing industry institutions in countries where we are
active and where such associations exist.
sectoral social dialogue
Randstad actively engages in the national and
international dialogue with labor unions. At EU level,
UNI-Europa and the World Employment Confederation
Europe (in which Randstad is represented) meet
regularly in the Sectoral Social Dialogue committee on
temporary agency work to discuss issues of mutual
importance, and to further professionalize and gain
more societal acceptance for the industry. Moderated
by the European Commission’s Directorate-General for
Employment, Social Affairs and Equal Opportunities, the
committee met three times in 2017. The 2017/2018 work
program included issues such as promoting national
social dialogue by inviting representatives of the
national bipartite funds. It also included a presentation
from the European Commission on the Posting of
Workers Directive, the EU Agenda for the Collaborative
Economy (EU DG Grow), and the New Skills Agenda for
Europe (EU DG Employment).
In 2017, the World Employment Confederation and UNI-
Europa carried out a joint project on labor market
intermediaries, online talent platforms, and the
changing world of work, making a comparison with the
characteristics and regulation of temporary agency
work. The project led to a set of joint conclusions and
recommendations, which will be fed into the activities
of the EU Sectoral Social Dialogue Committee on
temporary agency work.
overview of membership costs
in €
2017
2016
2015
2014
2013
WEC
80,657
77,293
64,088
59,088
57,930
Businesseurope
30,000
25,000
25,000
25,000
25,000
IOE
4,342
4,609
4,609
4,609
4,609
employment market KPIs
In accordance with our reporting framework, we also
report on our contribution to employment markets. In
this respect, two relevant KPIs are staffing penetration
rates and our contribution to the regulation of labor
markets. The former shows the development of the
number of temporary workers as a percentage of the
our value for society.
Having a meaningful job impacts
people’s lives. Through proactive and
constructive dialogue with
governmental authorities and other
relevant bodies and institutions, we help
shape the world of work, maximizing
future employment and economic
growth.
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total labor market, while the latter provides insight into
the status of regulation in the main countries in which
Randstad operates, as well as the expected trends.
A third relevant KPI is our involvement in national and
international employment institutions. The overview
‘highest randstad positions in industry associations’
shows Randstad’s participation in staffing industry
institutions in countries where we are active and where
such associations exist.
research, surveys and
publications
As a global HR services player, we aim to be a thought
leader in developing our industry. To enhance our labor
market knowledge and expertise, Randstad carries out
regular research and surveys, both independently and
in collaboration with academic partners and other
institutes. In addition, we give presentations around the
world, and our multiple publications are well received
by our stakeholders and the industry in general.
people to jobs, jobs to people
In the first quarter of 2017, together with the IZA Institute
of Labor Economics, Randstad published the results of
its ‘People to Jobs, Jobs to People’ research. In the
report, we summarize the determinants of worker
migration, highlight expected changes in labor supply,
and offer a comprehensive discussion of firms’ location
choices in the light of skill shortages. Randstad CEO
Jacques van den Broek presented this study to the Dutch
Minister of Economic Affairs in March 2017.
flexibility@work
Since 2013, Randstad has published Flexibility@Work, a
yearly report on flexible labor and employment. In the
2017 report, Randstad placed the results of its ‘People to
Jobs, Jobs to People’ study in context. The report
recommends that governments introduce a well-
managed skill-related migration policy to take full
advantage of growing global mobility.
workforce360
Workforce360 is the thought leadership blog where
Randstad promotes its insights, opinions and research
on specific areas of the world of work. Now in its fourth
year, it has narrowed its focus to Employer Branding, HR
Tech, and Talent Development. In 2017, workforce360
increased its readership by 400%.
local industry insights
Randstad also conducts research through its operating
companies around the world, collecting relevant
industry insights. This work yields a valuable source of
information for local stakeholders. Publications issued
include the World of Work research (Asia Pacific), the
Workpocket (Netherlands, Belgium and other
countries), various salary surveys tailored to specific
target groups (e.g., the Professionals segment), white
papers, and online polls.
memberships
world employment confederation
Through our membership of the World Employment
Confederation and its European arm, we strive for
recognition of the economic and social role played by
the employment industry in enabling work, job security
and prosperity in our societies and in acting as
facilitators of change. In May 2014, our Managing
Director Group Public Affairs was elected President of
the World Employment Confederation. She also chaired
the European arm of the World Employment
Confederation from 2005 to 2017.
B20 employment & education taskforce
The Business 20 (B20) is the official G20 dialogue with
the global business community. Its mission is to support
the G20 through consolidated representation of
interests, expertise, and concrete policy proposals,
combined with promoting dialogue among
policymakers, civil society, and business at an
international level. In 2017, the B20 was organized in
Germany by the Federation of German Industries (BDI),
the Confederation of German Employers’ Associations
(BDA), and the Association of German Chambers of
Commerce and Industry (DIHK). The primary focus of the
B20 Employment & Education Taskforce was on creating
‘Open, Dynamic and Inclusive Labor Markets Harnessing
the Potential of Technological Change and Creating a
Global Level Playing Field’. During four working group
sessions, Randstad contributed to the policy
recommendations, including a reference in the official
Policy Paper to our latest report on global mobility and
migration ‘People to Jobs, Jobs to People’. In this report,
we emphasize the need for migration policies to be
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aligned with labor market needs in order to enable the
voluntary movement of workers and eliminate structural
and legal barriers. Other policy recommendations
promoting open, dynamic and inclusive labor markets
include removing structural and legal barriers,
developing diverse forms of work, and advancing
female employment.
A full overview of our sustainability and industry
memberships is presented under ‘supplementary
information’.
sponsorships
OECD forum
Randstad is Gold sponsor of the annual OECD Forum,
which has become a global showcase for thoughtful and
revealing discussions on economic trends, especially on
the topic of human capital. At the OECD Forum in June
2017, Randstad CEO Jacques van den Broek spoke with
leaders from governments, civil society and business on
‘Bridging Divides in the Future of Work’. He also
participated in sessions on the gig economy and
inclusiveness in the future of work.
HR transformation forum
As one of the founding partners, Randstad has
sponsored the HR Transformation Forum since 2013.
The Forum is a high-level think-tank consisting of chief
human resources officers from global blue-chip
companies based across Europe. It provides HR leaders
with a safe platform to candidly discuss the challenges
they face within their companies’ transformations, spur
cross-industry fertilization of ideas, and exchange views
on the global HR themes of the future. As this forum has
evolved and put many big digital-transformation
dilemmas under a microscope since its inception, the
focus is now on the post-digital age. In 2017, the key
insights from the discussion focused on culture change
and transformation: how we will continue to thrive and
grow as an organization with all our technological
innovations, and ensure harmony.
events
international business & human rights
conference
On April 19, 2017, Randstad, the IOE and the
Confederation of Netherlands Industry and Employers
(VNO-NCW) organized the International Business and
Human Rights Conference at Randstad’s head office in
the Netherlands. The conference was attended by some
150 participants, the vast majority from business. Topics
covered were responsible business conduct, flexible
forms of work, ethical recruitment, respecting human
rights in the supply chain, and the private sector's role
in helping to achieve the Sustainable Development
Goals.
digital frontrunners
On October 11, 2017, Google and Randstad organized a
full day of conversation on the Future of Work with 200
leaders from governments, civil society and businesses
in the Netherlands. Keynote speeches were given by
Randstad CEO Jacques van den Broek, who addressed
our new Human Forward brand promise, and Eric
Schmidt, Executive Chairman of Alphabet Inc. At the
conference, a report drawn up by McKinsey & Company
on the ‘Future of Work in the Digital Frontrunner
Countries’ was presented, providing the backdrop for
the discussion.
pact for youth closing event
On November 23, 2017, Randstad CEO Jacques van den
Broek spoke at the First European Business-Education
Summit in Brussels, the closing event of the European
Pact for Youth, one of the biggest projects on youth
employment in Europe. Initiated in 2015, Pact for Youth
was an appeal to businesses, social partners, education
providers, and other stakeholders to develop and
consolidate partnerships in support of youth
employability and inclusion. In just two years, 23,000
business-education partnerships were formed, and
160,000 new opportunities for youth were created.
Randstad operating companies contributed to Pact for
Youth through several projects and programs.
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our value for society.
corporate social
responsibility
Our core values inspire us to use our knowledge and
experience to make a positive contribution to the world
around us. Through our social and volunteer programs,
we help communities around the world, particularly in
terms of skill and career development.
social innovation programs
Since 2016, we have been tracking all social labor
market projects our various operating companies are
running at a local level. In 2017 we saw a total of 100
social innovation programs around the world. An
overview of these local initiatives is available on our
website.
youth employment
Recognizing skills and striving for an inclusive labor
market are key in helping youth navigate their way to
sustained employment. Improving youth labor numbers
requires an in-depth understanding of employment and
labor market issues at local country level. Effective
cooperation between the private employment industry
and various public partners will be the recipe for success
in combating youth unemployment.
Our operating companies offer an array of initiatives to
assist young people in finding the right job. More
information about our initiatives on youth employment
can be found on our website.
diversified workforces
We value diversity. We do not discriminate on the
grounds of age, skin color, disability, gender, marital
status, nationality, race, religion, or sexual orientation,
and we have a non-discrimination policy to underline
this. Many of our operating companies have long-
standing diversity and reintegration programs, and
some provide consultancy services to clients on equal
opportunity and competency management. By forging
links with local community stakeholders, including
public, private, NGO, and institutional partnerships, we
stimulate diversity in the workplace. Our Randstad
Institute in France and our foundations in Germany and
Spain provide access to employment for disadvantaged
groups, such as immigrant workers, women at risk,
victims of domestic violence, single parents, older
workers, and the long-term unemployed. Addressing
the challenges that the growing number of older
workers face in entering, re-entering, or staying active
in the workforce is also part of our approach to
furthering employment market sustainability.
In line with our aim to promote diversity in our
workforce, we also welcome candidates with a
disability. We have found that registration of disabled
candidates varies in the different countries in which we
operate. This may be related to local legislation, but also
to the personal wishes of the people concerned. In
addition, we are running a variety of local programs to
advance employment participation of minority groups.
More information about our local initiatives regarding
diversified workforces can be found on our website.
a healthy and safe work environment for
candidates
Caring for people is embedded in our core values and
forms a mandatory part of our induction programs. It is
in this context that our consultants work with clients and
candidates to support workplace safety. Several of our
operating companies have specialized health and safety
managers to provide guidance. We advise our clients on
matters of occupational health and safety; for example,
by pointing out how to prevent workplace risks and by
providing 'security at work' training. Formal audits at
client locations are conducted in some business areas,
such as construction, where taking extra health and
safety precautions is best practice. More information
about our local initiatives for a healthy and safe work
environment can be found on our website.
Health and safety is also an ongoing topic at the
European Platform meetings, a Randstad network of
national works council representatives, in which
candidates are also represented.
We have a global Health & Safety Policy which states that
Randstad is committed to providing and maintaining a
healthy and safe work environment, and promotes well-
being at work, doing all that is reasonably practical to
prevent personal injury and illness and to protect our
candidates, employees, clients, and visitors from
foreseeable work hazards.
All workers across the labor market have a right to a
healthy and safe work environment. Our health and
safety management is organized locally at operating
company level, designed to safeguard business
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continuity and deal with risks. Our operating companies
adhere to all applicable local standards and regulations,
and are expected to have a sophisticated health and
safety structure in place. We track sickness rates, work-
related accidents or incidents resulting in lost-time
injury, as well as work-related fatalities, both for
employees and candidates. Fatal incidents are
immediately reported to the Executive Board.
In the past year, we provided work to more than
two million people. Our first duty as a company is to
make sure we do not send anyone into a work
environment that may be harmful to them.
Unfortunately, despite our best efforts, accidents
occurred that resulted in injuries. The aggregated
number of work-related injuries among our candidates
globally amounted to 25,995 (2016: 24,972), while the
number of working days lost due to these injuries added
up to 377,873 (2016: 338,797). Based on these data, our
'injury rate' is stable at 0.2% of overall days worked.
Much to our regret, in 2017, we were also confronted
with 8 fatal incidents among candidates:
number of fatal incidents among candidates
20171
2016
At work
USA
0
1
Netherlands
3
1
Germany
1
0
Belgium & Luxembourg
1
0
France
2
2
In traffic (while working)
France
0
1
Japan
0
2
India
1
3
8
10
1 Excluding natural causes.
We treat prevention, training, and safety awareness in
general as very important subjects. We realize that while
a zero score may prove impossible to achieve at the
scale we operate, this is nevertheless the only
acceptable target.
a healthy and safe work environment for our
employees
Our operating companies use a variety of measures
designed to advance employee well-being. These
include procedures to promote safety at work, training
programs, health checks, and services and products to
enhance overall employee wellness. In our countries, we
have formal agreements with trade unions on health and
safety topics. Local initiatives to stimulate a healthy and
safe work environment include online platforms for a
healthy lifestyle, driver safety programs, and more.
In 2017, the overall sickness absenteeism rate was 1.7%
of overall days worked (2016: 1.8%). The total number of
working days lost due to sickness was 166,963 (2016:
153,747).
Randstad has globally aligned crisis and continuity
plans. Serious security incidents are reported (and in
some cases dealt with) at the highest level.
Unfortunately, despite our high safety standards, we
again faced several incidents in 2017, causing 162
injuries among our employees (2016: 217). The number
of working days lost due to these injuries amounted to
1,249 (2016: 944). This results in an overall injury rate of
0.01% of overall days worked.
employability advancement
Ongoing skills development is essential for
employability and sustainability in any workforce. Our
training programs are tailored to meet the needs of
clients and candidates in individual employment
markets. Such programs include courses specific to IT,
sales, contact centers, hospitality, and technical skills.
Specialized programs leading to additional professional
qualifications are also part of training and development.
More information about our local initiatives in
employability advancement can be found on our
website. The development of funds invested in training
and development of candidates in recent years is shown
in the graph below.
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candidate training costs
in millions of €
78
91
110
2015
2016
2017
0
50
100
150
200
social involvement
We measure staff perception of social involvement in the
organization to gain a better understanding of how our
own people feel about Randstad's social performance.
More specifically, we ask them if they feel it is important
for their company to be socially involved, and whether
they perceive Randstad as being so. The results are
shown in the graph 'Employee perception of social
involvement'.
employee perception of social involvement
as % of total number of respondents
81%
83%
68%
69%
importance of social involvement
perceived as socially involved
2016
2017
0%
25%
50%
75%
100%
Source: Great People Survey
In early 2018, we will launch a global online platform to
connect Randstad employees worldwide to good
causes they care about. This platform will also be
instrumental in bringing the human forward mission to
life, will help to further elevate our employee
experience, and will enable us to showcase the
tremendous impact that Randstad people have on the
lives of others every day. YourCause has been selected
as platform partner for this initiative. Randstad
employees around the world are engaged in a wide array
of corporate citizenship or social activities, often using
internal communication mechanisms to promote their
cause, engage colleagues and raise funds. This platform
will assist in initiating projects, gaining and providing
support, and engaging with colleagues both at a local
and global level.
voluntary service overseas (VSO)
For almost 14 years now, Randstad has had a valuable
partnership with VSO, the world’s leading development
NGO that fights poverty through the knowledge and
skills of volunteers. Randstad is VSO's global
employability partner, supporting VSO's work to help
marginalized people to access the labor market. This is
achieved by giving our employees an opportunity to
volunteer in international VSO projects that focus on
employability. We also use our knowledge and
infrastructure, pro bono secondments, and joint
marketing efforts to help VSO become better at
recruiting volunteers across the world.
Driven by our (and VSO's) strategic focus on
employability, in 2017, we directly supported two VSO
projects that focus on improving employment and
entrepreneurship opportunities for the most vulnerable,
especially youth and women: the Randstad Youth
Employment Project (RYEP) in Tanzania and the Aaghaz
project in India.
The RYEP project went from strength to strength in 2017.
The project was revised to focus specifically on three
interventions that maximize the use of Randstad's
skillset: providing career guidance, soft skills training/
coaching, and developing connections between the
private sector and youth looking for employment
opportunities.
In 2017, 19 Randstad volunteers supported six VSO
projects looking to enhance youth employability
through skills development. Specifically, Randstad's
RYEP team in Tanzania provided career guidance and
soft skills training, resulting in 330 students starting
apprenticeships and 24 teachers receiving training on
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the world of work. The team's achievements were
recognized by VSO by granting them the Volunteer
Team Award in December 2017. The team was
commended for acting as role models and quickly
learning and understanding the culture. They were also
praised for using sustainable models of development, so
that the work they did in Tanzania will have a lasting
impact.
Randstad also provided a recruitment consultant to
develop and build the capacity of VSO's in-country
recruitment function in Tanzania. In addition, one of our
senior leaders went to Tanzania on a two-week
placement as a senior private sector engagement
volunteer with the goal of creating relationships
between the private sector and national partners across
three Youth Employability and Enterprise projects. As a
result, links have now been established and/or
strengthened with several influential organizations,
which have subsequently offered vacancies and/or
internships to graduates.
Until September 2017, Randstad was also involved with
the Bharti Infratel Aaghaz project in India. Five Randstad
International, and two Randstad India volunteers
strengthened the design, delivery, and impact of the
project by providing coaching and mentoring,
placement and marketing, communications, and
organizational development support. In the space of
one year, the project was able to train 1,003 young
women from urban slums in selected trades, placing 712
of them into employment opportunities.
From October 2017, Randstad embarked on an exclusive
partnership with VSO India to help train and enhance the
employability of disabled youth in the Ranchi district in
India. Two international volunteers are starting their
placements in early 2018 to support VSO in developing
and implementing a communications strategy.
For 2018, our aim is to offer more diverse volunteering
opportunities to reach more Randstad employees and
maximize our impact. In addition, we will increase our
focus on the actual impact we have in our target
countries by measuring it. In this way, we will be able to
make our vision of 'improving the employability of poor
and marginalized people' more tangible.
attitude of employees towards VSO
as % of total number of respondents
67%
65%
38%
37%
awareness of partnership
willingness to contribute
2016
2017
0%
20%
40%
60%
80%
Source: Great People Survey
other volunteer projects
In addition to the VSO projects, Randstad participated
in many other volunteer projects in 2017, including
socially involved and philanthropic initiatives. The total
amount spent on corporate philanthropy (excluding
VSO) in 2017 was € 1,888,787 (2016: € 1,359,080). We
have a global policy for corporate citizenship and
philanthropy. The purpose of this policy is to define
common shared rules within Randstad for identifying
corporate citizenship and philanthropy initiatives that,
in line with our mission, core values, business principles,
and internal policies, are aimed at meeting the needs of
communities or societies in which Randstad operates.
other volunteer projects on behalf of randstad
2017
2016
Volunteer hours
9,200
5,9001
Volunteers
1,560
980
1 Adjusted.
For example, Randstad Belgium participated in the
Action Day of a regional youth association called
'Youca'. Randstad published a job offer on its website for
randstad vso volunteers overseas 2013−2017
2017
2016
2015
2014
2013
Volunteer hours
15,200
11,000
10,200
10,300
10,500
Volunteers
19
20
19
16
15
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'one day as an employability coach'. Young people could
apply and several were selected to spend a day with
Randstad colleagues. During this day, they were
informed about Randstad's work methods and
participated in a workshop that would help them coach
others.
Randstad USA is continuing to build a strong
relationship with its national charitable partner Junior
Achievement. This partner's new program, JA Career
Bound, enables high school students to learn the skills
necessary to succeed in today's workforce. Randstad
USA also continued the Hire Hope program, which is
designed to impact the lives of young women affected
by human trafficking. The program teaches them
résumé writing, interview skills, and behavior in the
workplace in weekly sessions for ten weeks. Upon
completion, they will be given the opportunity to
interview for an apprenticeship at Randstad
Sourceright. If they are accepted, the women work five
days a week screening candidates and are paid for their
duties.
Randstad UK Construction Property & Engineering has
established a new charity partnership with the
Lighthouse Construction Industry Charity, which
focuses on helping unemployed construction workers
to get back into the industry, supporting them from both
a financial and rehabilitation perspective.
Randstad Germany has a project called ‘Ehrensache’,
which allows Randstad employees to receive funding for
voluntary work they undertake in their free time. The
purpose is to support projects for the common good, to
promote voluntary work, and to stimulate employees to
broaden their personal outlook and build networks.
Randstad Argentina supports a program against child
labor, called ‘Jardines de Cosecha’ (Harvest
Kindergarten). The program runs during harvesting
seasons, and provides rural workers with a safe place to
leave their children during the work day.
Randstad Hong Kong wants to #payitforward to its local
community through a series of small actions. The focus
areas are enhancing education and empowering youth.
More information about these initiatives and other
examples of local volunteer initiatives can be found on
our website.
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sustainability basics.
'Shaping the world of work' can only be achieved if
attention is also paid to sustainability 'basics'. These
range from safeguarding ethical behavior, applying
decent environmental care, and taking supply chain
responsibility to being a good corporate citizen and
ensuring our organization is transparent. Our goal is to
have management tools, business principles, policies,
and a governance structure in place that are in line with,
or exceed, the standards set for our industry.
Our Executive Board bears ultimate responsibility for the
Group's social responsibilty and sustainability basics,
while related topics are regularly discussed with the
Supervisory board. Depending on their size, our
operating companies have their own CSR or
sustainability managers, or a dedicated coordinator. The
Group Sustainability Manager reports directly to the
Company Secretary.
business principles
Randstad's business principles are based on – and
support – our core values. They project a positive
message, help us live up to our values, and ensure that
the needs of the world in which we work, as well as our
business and personal behavior, are well aligned and
reinforce one another. Our business principles can be
found in the 'corporate governance' section on our
website.
Our business principles − coupled with our key
corporate policies referred to below − are an integral and
mandatory part of our global induction program. Local
induction training programs include an explanation of
our core values, the business principles, some of our
policies, and the misconduct reporting procedure.
Since 2014, training in business principles is part of our
key control framework for ensuring global execution.
In 2017, around 7,000 new employees and 6,000
existing employees received business principles
training. To set a minimum standard, we developed a
compliance induction training program format, both in
PowerPoint and as an e-learning tool. In addition, we
developed a set of five cartoons that support training
and communication on our business principles and
corporate policies. These cartoons are available in 16
different languages.
Understanding of our business principles is measured
through our annual Great People Survey. The results of
this part of the survey can be found in the table
'Understanding of business principles'.
To further enhance awareness of the business
principles, they are included in our HR Standards and
communicated through various internal communication
channels across the Group.
corporate policies
The majority of our corporate policies are directly linked
to our business principles. They provide our people
around the world with specific guidance and
instructions on their business behavior. 
Over the years, we have developed other key corporate
policies related to compliance with business principles:
competition law; insider dealing; bribery, gifts &
hospitality; data protection; non-discrimination,
intimidation & harassment; contract approval; and e-
communications. These policies are a mandatory part of
our induction training, and are highlighted during
refresher training, tailored to the local operating
company and the position of the relevant employee, and
included as controls in our key control framework.
Promoting best practices and raising awareness of
relevant laws and policies is an ongoing process
understanding of business principles 1
2017
2016
North America
86%
86%
Netherlands
92%
92%
France
77%
78%
Germany
95%
96%
Belgium & Luxembourg
94%
88%
Iberia
84%
84%
Italy
83%
85%
Other European countries
81%
74%
Rest of the world
72%
73%
Corporate
93%
96%
Group
84%
83%
1 The data includes only part of global businesses. The following entities are not yet
covered: Monster, Sourceright North America, RiseSmart, and twago.
Source: Great People Survey
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worldwide. In 2015, we developed a tailor-made
compliance refresher training program: Randstad Rules!
This e-learning program can be easily adapted to other
languages and local rules. In 2016, it was already used
by several Randstad operating companies worldwide,
and more operating companies adopted it in 2017.
Randstad Rules! is also an effective tool to make recently
acquired companies familiar with the Randstad core
values, business principles, and related policies.
Our position with regard to tax control, tax contribution,
tax compliance, and tax planning is elaborated on in our
tax policy. In line with our core value 'simultaneous
promotion of all interests', and in order to safeguard our
good reputation, Randstad demonstrates ethical tax
behavior by paying the proper amounts of taxes in the
countries where value is created. Randstad Holding was
listed in fourth position in VBDO's (Dutch Association of
Investors for Sustainable Development) Tax
Transparency Benchmark. We scored the maximum
points for our knowledge and management of risks and
for our monitoring and testing of tax controls.
Randstad also has an environmental policy. Realizing
that the world's natural resources are limited and fragile,
we believe environmental protection is consistent with
our overall goals and core values, and should therefore
be an important consideration in our activities. This
commitment to environmental protection is reflected in
our sustainability framework. It is validated through a
materiality analysis, and included in all our programs
and practices that encourage the conduct of operations
in a manner that is both environmentally and
economically responsible.
In addition, we have a global Health & Safety Policy and
a global Corporate Citizenship & Philanthropy Policy. In
2017, we developed a Diversity Policy.
Our corporate HR Standards are not only based on our
core values and business principles, but also on our
sustainability ambitions. These standards are designed
to guide our company and to safeguard the recruitment,
development, and retention of our employees − our
most important asset. They are essential in helping us
achieve our strategic goals, which is why our policies
and sustainability framework are not only included in our
HR Standards, but also form a mandatory part of our
induction training.
Randstad's corporate policies are published on our
intranet sites and on our website (in whole or in
summary). Through our in-control framework (which
includes the key control framework), our operating
companies certify, semi-annually, their compliance with
many of the policies, or explain any deviations.
human rights
Randstad recognizes its impact on labor markets, which
is often closely related to human rights. We therefore
consider this topic relevant and operate in accordance
with several global agreemens and conventions.
We are signatories to, and participants in, the United
Nations Global Compact, and we support its Ten
Principles regarding human rights, labor rights, the
protection of the environment, and anti-corruption.
More details about our progress are available on the
website of the UN Global Compact
(www.unglobalcompact.org).
The principles regarding labor are those outlined in the
ILO Declaration on Fundamental Principles and Rights at
Work. These are freedom of association and the right to
collective bargaining, elimination of forced or
compulsory labor, the abolition of child labor, and the
elimination of discrimination in respect of employment
and occupation. While always complying with national
laws and practices, we are also committed to making the
Global Compact's principles part of Randstad's strategy,
culture, and day-to-day operations. We therefore regard
the Ten Principles as forming part of our business
principles. Our CEO explicitly expressed Randstad's
support to the UN's Secretary-General.
Randstad Holding's CEO and CFO signed the UN's Call
to Action to Governments to promote anti-corruption
measures and to implement policies to establish
systems of good governance. Signing this Call to Action
underlines our commitment to opposing corruption in
all its forms, including extortion and bribery. We believe
that corruption is one of the greatest obstacles to
economic and social development around the world.
For this reason, Randstad will join Transparency
International as of 2018.
Over the past years, Randstad has participated in the
Business and Human Rights Initiative of the Global
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Compact Network Netherlands. As part of this, we have
embedded the Ten Principles into our corporate policies
and developed a tool for human rights risk mapping. To
that end, we published our Human Rights Impact
Assessment. We also reviewed our global key control
framework and expanded it to cover a number of
relevant risks and controls related to business and
human rights, notably bribery, workers' rights, health
and safety, and discrimination. Other ways in which we
monitor potential human rights risks include continuous
training of our employees and management locally, and
promoting organizational sensitivity to human rights
issues in general.
Based on the outcome of its 2016 human rights self-
assessment, Randstad has adopted the human rights
chapter of the OECD Guidelines as a benchmark for its
international activities. As we recognize our role in
public labor market debates, we aim to increase our
efforts in safeguarding human rights. In 2018, we will
work on optimizing our human rights self-assessment
and decide how we can further contribute to the public
debate.
benchmarks
In 2017, for the third consecutive year, Randstad was
included in the annual Dow Jones Sustainability Index
(DJSI) review. Launched in 1999, the DJSI World is the
first global index to track the leading sustainability-
driven companies worldwide, based on RobecoSAM's
analysis of financially material Environmental, Social,
and Governance (ESG) factors. Randstad is the only HR
services provider to be admitted to membership of the
Professional Services industry section of the DJSI World
and DJSI Europe indices. Randstad was assessed best in
class on the social dimension, including the areas of
human capital development, labor practice indicators,
and talent attraction and retention. Other areas
assessed as best in class were materiality and policy
influence. As one of the top-scoring companies in our
industry, Randstad also qualified for inclusion in
RobecoSAM's 2018 Sustainability Yearbook and
received the Silver Class distinction for its excellent
sustainability performance.
We are also an active participant in other international
benchmarks and platforms, such as the MSCI ESG,
FTSE4 Good, Dutch Transparency Benchmark, Euronext
Vigeo, Ethibel Sustainability Index, VBDO's tax
transparency benchmark, the Carbon Disclosure
Project, Ecovadis, and Sedex.
integrity and grievance
mechanism
The Randstad misconduct reporting procedure
encourages the reporting of serious misconduct,
preferably directly to local management and through
established operational channels. If, for any reason,
these reporting lines are considered inappropriate or
are likely to be ineffective, or if a complainant fears
retaliation, use can be made of our special reporting
facility, which consists of a telephone hotline
(accessible 24 hours a day via free local access
numbers) and a secure web page. The reporting facility
is open to all of Randstad's stakeholders: employees,
candidates, and third parties. Although reports can be
submitted anonymously, Randstad encourages
complainants to reveal their identity when they submit
a report. This greatly facilitates the investigation of the
issue. Reports can always be made in the local language.
The reporting facility is operated by an independent
external provider and allows communication between
the parties, even if the misconduct was reported
anonymously. This way of communicating with an
anonymous complainant has proven to be successful in
several instances. Consistent with Randstad's
decentralized organization, reports are received by local
integrity officers, who are responsible for handling
complaints, supported, where appropriate, by other
functions, either locally or within Randstad Holding.
Actions resulting from this procedure vary from
apologizing to the complainant and correcting mistakes
to termination of employment, be it of a candidate or an
employee, including in senior positions. These actions
must make clear to all involved or impacted that
breaches are not tolerated by Randstad.
Taking into consideration the implications of the UN's
'Protect, Respect and Remedy' framework, we continue
to work on raising and maintaining awareness of our
grievance mechanism, including among our employees
and candidates. In 2017, we again focused on raising
awareness within those operating companies that
showed a lower awareness score in the Great People
Survey, as well as within recently acquired companies,
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while keeping awareness elsewhere at least at the same
level. This resulted in an overall increased score of 78%
(+5%). In some countries, the increase was particularly
notable, such as in Sweden (+48%), Norway (+26%), and
Belgium (+21%). Our e-learning tool Randstad Rules! has
proven to be effective here. We also saw a substantial
increase in the total number of complaints and concerns
raised in 2017 (+50%) compared to 2016. However, these
again included a substantial number of complaints that
bypassed the normal appropriate local reporting
channels, such as the branch manager or local
complaint or help desks. This is fairly consistent at
approximately two-thirds of all complaints. Through
local communication efforts, we aim to maintain and
increase awareness of the correct routing.
Of the total of 221 reports made in 2017, 71 were
accepted as admissible. After thorough investigation of
these 71 reports, 49 were found to be not proven, and
22 were (partially) proven. The proven complaints (22)
related to intimidation and harassment (10), non-
compliance with internal policies and procedures (4),
improper management practices (3), health and safety
issues (2), fraud (2), and breach of non-compete (1).
misconduct reporting
2017
2016
New complaints
221
174
Of which anonymous
86
47
Concerns referred to other channels/not
legitimate
150
119
Proven or partially proven
22
14
Not proven
49
41
Under investigation1
0
0
Total
221
174
1 Of the 5 complaints reported as 'under investigation' in 2016, one was referred to
another channel and 4 were investigated and appeared to be 'Not proven'.
The vast majority of the reports (141) were made by
candidates or former candidates; most of these were
referred to local management or the local complaint or
help desks. A total of 14 reports were made by clients
and other external parties, and in 32 cases – due to
insufficient information being provided by anonymous
reporters − it was not clear who made the report. The
remaining 34 reports came from employees or former
employees.
All valid reports were followed up internally, usually by
local teams with the support of the local integrity officer
and/or the risk manager. If the report related to local
management, it was followed up by the central integrity
officer and the Group Business Risk & Audit staff. All
proven reports were followed up by corrective action,
which varied depending on the facts. Corrective action
included additional training, coaching and/or
monitoring for the people involved; this was especially
relevant in cases of non-compliance with internal
policies and procedures, and improper management
practices. One report related to a candidate carrying out
activities at a client. This was followed up with the client
and resulted in offering the candidate another
assignment; the client handled the case internally. In the
cases of intimidation and harassment and racism, the
corrective action varied from a written warning and
further coaching (4) to demotion (1) and dismissal (2) of
the accused.
Understanding of our misconduct reporting procedure
is measured through our annual Great People Survey.
The results of this part of the survey can be found in the
table below.
awareness of misconduct reporting procedure 1
2017
2016
North America
79%
76%
Netherlands
66%
70%
France
86%
85%
Germany
89%
87%
Belgium & Luxembourg
78%
58%
Iberia
72%
70%
Italy
74%
75%
Other European countries
74%
62%
Rest of the world
68%
70%
Corporate
90%
85%
Group
76%
73%
1 The data includes only part of global businesses. The following entities are not yet
covered: Monster, Sourceright North America, RiseSmart, and twago.
Source: Great People Survey
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supply chain responsibility
Our suppliers make an important contribution to the
quality of our services. We therefore ask them to
embrace our standards and to comply with our Supplier
Code. This code is an integral part of our international
terms and conditions. It aims to ensure that the
procurement of goods, works, and services takes place
in a socially responsible manner and in conformity with
our business principles. In this code, we explicitly
request that our suppliers respect our regulatory, social,
and ecological principles, and adopt practices
consistent with those principles. Suppliers must ensure
that their own suppliers and subcontractors also respect
the principles set out in the code. We consult with
suppliers periodically in order to verify compliance with
the code. If deemed necessary, Randstad may have an
audit conducted at the supplier's premises. The Supplier
Code is published on our website. At the end of 2017,
around 32% of our procurement expenditure worldwide
was covered by our Supplier Code.
A good example of our supply chain management is the
procedure followed by Randstad Argentina. This works
as follows: the first mandatory step for suppliers in
formalizing the relationship is to register on Randstad's
website and explicitly subscribe to the Supplier Code.
Once they are in the system, they are automatically
notified when changes are made to the Supplier Code
or to other conditions. Randstad Italy launched a new
web portal for the qualifications of its suppliers. This
consists of a very detailed questionnaire with general
information about the supplier company, its
organizational structure, its approach to quality and
social responsibility, and relevant certifications.
On a global scale, around 9.5% of our cost base consists
of supplier spending. The graph 'Composition of the
supply chain' shows the proportions of the various
supplier categories across the globe.
our impact on the
environment
Because Randstad is a 'people' business, our impact on
the environment is much less than that of some other
sectors, such as manufacturing. Almost all of our
business is conducted in local markets, and we have
many locations close to both clients and candidates,
greatly reducing travel and the resulting CO2 emissions.
Despite this inherently minimal impact, we do what we
can to limit our ecological footprint by conserving
energy, using sustainable energy sources, and reducing
water and paper usage, while re-using or recycling
wherever possible. We have set the target to use at least
50% electricity from sustainable sources in 2018, and to
reduce our CO2 emissions by 8% in 2018. In 2017, we set
an additional target on emissions related to business
travel by car. We aim to decrease the weighted average
CO2 emission per km driven by 10% by the end of 2022,
for example by using cars running on sustainable
sources.
In mid-2015, we established a global environmental
policy. This commitment to environmental protection is
reflected in our sustainability framework, validated
through a materiality analysis, as well as in our programs
and practices for conducting operations in an
environmentally, as well as economically, responsible
manner. The policy can be found on our website.
In 2016, we participated in the Global Climate report of
the Carbon Disclosure Project (CDP), where we scored
composition of the supply chain
total costs: € 22,279 1
supplier costs: € 2,116
other costs
as % of total (supplier) costs (x 1,000)
cost of services
IT costs
supplier costs
1   Actual reported operating expenses and cost of services excluding amortization 
    and impairment of acquisition-related intangible assets.
advertising and marketing
general costs
personnel expenses
accommodation
12%
47%
11%
11%
10%
10%
9%
91%
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a B (management level), which is above industry
average. Our operating companies are taking further
steps at management level to effectively reduce
emissions, indicating more advanced environmental
stewardship.
co2 footprint
As a part of our framework, we continue to improve the
completeness and accuracy of our Group
environmental data, using a step-by-step approach. In
2012, we concentrated on measuring our impact due to
travel, in particular journeys made using company cars.
In 2013, we added to this the distances traveled by air.
In 2015, we performed an internal review on the
environmental data reported in 2013 and 2014. The main
operating companies (constituting 90% of the total)
were asked to check their data and make adjustments
where necessary. This gave us better insight into the
challenges related to collecting and reporting
environmental data, which led to improvements and
more extensive coverage. In 2016, a consulting
company completed an audit in order to gain even more
insight into the possible improvements regarding data
collection and reporting, and the feasibility of external
assurance.
We report our CO2 footprint according to the
Greenhouse Gas Protocol. We therefore no longer
report the emissions of water, paper and waste (formerly
scope 3). We still face challenges with regard to
collecting actual figures on water and general waste. We
use mostly estimates to calculate the numbers, because
only a few operating companies are able to receive this
information from their suppliers. Most of our branches
are located in collective tenant buildings, where there is
collective water usage and the collection of waste is
centralized, which means we cannot collect our own
data. For 89% of our operating companies, the
estimated water usage in 2017 was 325,000 m3 (2016:
245,000 m3) and our waste 1,600 metric tons (2015:
1,400 metric tons).
energy resources
To limit the use of fossil fuels, we constantly seek to
increase the use of alternative, efficient, and natural
energy resources (e.g., by replacing traditional lighting
by LED lighting in our buildings). We transferred most of
our computing capacity to the cloud and are in the
process of rolling this out to all operations on a global.
Thereby we expect to further reduce our energy
consumption of servers by only making them available
our CO2 footprint1
2017
2016
usage
CO2 emission
usage
CO2 emission
Scope 1 (direct emissions)
Gas for heating (m3)
3,204,011
6,036
3,311,360
6,239
Fuel for heating (ltr)
59,000
188
41,000
131
District heating (Gj)
13,207
264
13,369
267
Business cars petrol (ltr)
5,381,000
15,067
4,926,000
13,793
Business cars diesel (ltr)
11,003,000
35,210
10,887,000
34,838
CO2 metric ton scope 1
56,765
55,268
Scope 2 (indirect emissions)
Electricity (Gj)
190,531
20,588
188,786
19,488
Sustainable electricity (Gj)
76,429
-
73,497
-
CO2 metric ton scope 2
20,588
19,488
Scope 3 (remaining emissions)
Airplane (km)
48,072,640
9,615
43,111,049
8,622
CO2 metric ton scope 3
9,615
8,622
Total CO2 metric ton
86,968
83,378
1 Based on our largest operating companies. In the near future Randstad aims to have 100% coverage of operations.
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when we need them. The Randstad corporate head
office is the only major building we actually own; almost
all other buildings worldwide are rented. Our head office
uses 100% certified green electricity and the Randstad
Belgium head office is certified for BREEAM (Building
Research Establishment Environmental Assessment
Method).
Increasing our people's awareness of simple ways to
reduce the use of energy in our offices is the least we
can do. At the same time, its impact is difficult to
measure, given the fact that our offices are often leased
all-in, and we share buildings with other tenants. We
continue to try convincing our landlords to provide us
with specifications of energy use, separate from lease
costs, or to install smart meters. Our European operating
companies have taken the necessary steps to comply
with the European Commission's Energy Efficiency
Directive and will increasingly have better insight into
their energy consumption and possible improvements.
travel and company cars
We are limiting our business travel impact on the
environment by increasing the use of video and phone
conferencing and VoIP. However, due to the growth of
our organization and the fact that a number of recent
acquisitions are now included and reported for the first
time, we saw an increase in the number of business
flights in 2017. Increasingly, we are digitalizing time
sheets and staffing contracts, including signatures,
which reduces paper use and traveling by both
candidates and our own consultants. Several operating
companies have switched to hybrid or fuel-efficient
cars, or cars with capped CO2 emissions. In addition,
various operating companies run bike schemes,
commuting projects, gas-saving contests, and other
initiatives to reduce conventional energy usage. If
traveling cannot be avoided, we prefer train travel over
plane or car travel, which in several countries is
supported by strict policies. In the Netherlands, we
participate in a CO2 compensation program for business
flight emissions with our national airline.
More information about our local initiatives on the
environment can be found on our website.
company cars
average number
of cars
kilometers driven
(x 1,000)
2017
2016
2017
2016
North America
-
-
-
-
Netherlands
3,361
3,382
97,088
98,376
France
1,854
1,735
32,988
34,129
Germany
1,801
1,732
55,026
50,820
Belgium & Luxembourg
1,848
1,657
47,213
41,812
Iberia
759
748
18,824
17,634
Italy
456
393
9,265
7,452
Other European
countries
796
548
11,283
11,719
Rest of the world
554
571
12,327
10,595
Global businesses1
192
17
2,354
211
Corporate
139
125
3,053
3,302
Group
11,760
10,908
289,421
276,050
1 Global businesses (Monster, Risesmart, Sourceright and twago) are now included
and reported separately for the first time, except Sourceright, which used to be
included in the country reporting in 2016.
business flights
total distance traveled (x 1,000 km)
2017
2016
North America
27,548
22,681
Netherlands
615
364
France
3,614
3,482
Germany
2,452
2,370
Belgium & Luxembourg
484
134
Iberia
5,514
5,110
Italy
1,006
849
Other European countries
3,931
2,120
Rest of the world
13,750
14,038
Global businesses1
12,383
1,810
Corporate
9,458
9,945
Group
80,755
62,903
1 Global businesses (Monster, Risesmart, Sourceright and twago) are now included
and reported separately for the first time, except Sourceright, which used to be
included in the country reporting in 2016.
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our tax contribution
Throughout the world, Randstad companies pay various
taxes levied by tax authorities. The main categories of
taxes are corporate income tax, value-added tax (VAT),
and wage tax and social insurance. The breakdown is as
follows:
corporate income taxes paid
in millions of €
2017
2016
North America
2.7
(1.5)
Netherlands
26.7
27.7
France
43.0
38.7
Germany
15.0
(3.9)
Belgium & Luxembourg
27.9
3.2
Iberia
7.7
6.2
Italy
12.9
20.8
Other European countries
7.4
12.6
Rest of the world
13.5
23.6
Global businesses
1.3
4.8
Corporate
28.2
27.7
Total
186.2
159.8
Corporate income taxes paid in North America are
relatively low as a result of accumulated net operating
losses that are offset against taxable income.
Randstad Holding and its Dutch subsidiaries form a
fiscal unity for corporate income tax.
In Germany, the 2016 taxes paid were distorted due to
receipts from prior years. The 2017 taxes paid in Belgium
were impacted by payments related to 2016.
other taxes paid in 2017
in millions of €
VAT1
wage tax
and social
insurance
total
North America
59
1,226
1,285
Netherlands
630
879
1,509
France
640
1,347
1,987
Germany
359
733
1,092
Belgium & Luxembourg
263
494
757
Iberia
269
421
690
Italy
33
475
508
Other European countries
336
569
905
Rest of the world
211
363
574
Corporate
(6)
22
16
Total
2,794
6,529
9,323
1 Value added tax/sales tax.
In 2016, other taxes paid amounted to € 8,147 million
(€ 2,449 million for VAT and € 5,698 million for wage tax
and social insurance).
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reporting framework.
our ambition:
by 2030, we will touch the work lives of
500 million people worldwide
pillars
our value for clients:
optimal workforces
our value for candidates:
the best jobs
our value for employees:
employer of choice
key material
matters
• client relationship management
• innovation management
• increase of labor market flexibility and
mobility
• training and education
• health & safety management
• talent attraction and staff retention
• employee engagement
• training and education
• health & safety management
• labor management relations
 
risks
• changing economic and geopolitical
conditions
• contract liability and delivery
• workplace health and safety
• technological disruption
• information technology and cyber
security
• workplace health and safety
• talent attraction and retention
• technological disruption
• information technology and cyber
security
500 million
people plan
• enabling clients to improve their
performance
• developing Tech & Touch innovations
• developing Tech & Touch
innovations
• improving employability
• promoting equal opportunities
• developing Tech & Touch innovations
• improving employability
• promoting equal opportunities
KPIs1
• net promoter score (NPS)
• market share
• investments in innovation
• # of initiatives to place candidates
with disabilities
• # of initiatives to guide people from
unemployment to employment
• # of training hours; training costs
• # of candidates
• # of permanent placements
 
• proportion of males and females in
senior leadership positions
• # of training hours; training costs
• employee retention rate
• outperformance score
measurable
targets
• NPS: top 3 position or position
improvement in our top 12 markets
• increase market share in our main
markets
• professionals growth above market
• two digitally driven new business models
with above average topline growth
• increasing # of initiatives to place
candidates with disabilities
• increasing # of initiatives to guide
people from unemployment to
employment
• permanent placements growth
above market
• proportion of females in senior
leadership positions: 50% in 2017
• outperformance score higher than
benchmark (with a participation rate
of 80% or higher in the Great People
Survey)
SDGs
• targets: 8.2 and 8.3
 
• target: 4.4
• targets: 5.1 and 5.5
• targets: 8.2; 8.5 and 8.6
• target: 10.2
• target: 4.4
• targets: 5.1 and 5.5
• targets: 8.2; 8.5 and 8.6
• target: 10.2
1 Progress on KPIs per pillar is reported both in the value chapters and in the performance section.
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our mission:
shaping the world of work.
 
pillars
our value for investors:
creating EVA
our value for society:
shaping the world of work
sustainability
basics
key material
matters
• performance & risk management
• competitiveness of the company
• increase of labor market
flexibility and mobility
• legislation & regulation
• economic and social impact of
labor on society
• corporate citizenship
• business principles & human rights
• stakeholder management
• customer protection
• reputation management
• environmental impact
• corporate governance
• sustainable supply chain management
risks
• credit risk
• other financial reporting risks
• changing economic and geopolitical
conditions
• competition law compliance
• tax and labor law compliance
• data protection laws and regulations
500 million
people plan
• enabling clients to improve
• developing Tech & Touch innovations
• promoting equal opportunities
• contributing to labor markets
• contributing to society
• safeguarding labor & human rights
• taking environmental care
KPIs
• EBITA
• incremental conversion ratio
• recovery ratio
• staffing penetration rates in
our markets
• thought leadership
• dialogue with policy makers
• # of hours and employees involved in VSO
• other community engagements
• sustainable procurement
• injuries and fatalities during work
• sickness absence
• corporate employees covered by a CLA
• # of employees trained in business principles
• # of business principles incidents (misconduct
reporting procedure)
• measures to decrease our environmental
footprint
measurable
targets
• EBITA margin of 5% to 6% over time
• incremental conversion ratio towards
50%
• recovery ratio ≥ 50%
• dividend payout ratio of 40% to 50% of
adjusted earnings per share (EPS)
• increase of market share
• optimization of economic value added
(EVA)
• staffing penetration rates:
increased in top 8 markets,
where measurable
• included in the Dow Jones Sustainability Index
• zero fatalities and relative reduction of injuries
• % of electricity from sustainable sources: 50%
in 2018
• reduction of CO2 emissions of 8% in 2018
• business cars: 10% decrease of the weighted
average CO2 per km by the end of 2022
SDGs
• targets: 8.2 and 8.3
 
• targets: 5.1 and 5.5
• targets: 8.5 and 8.8
• target: 10.2; 10.3 and 10.4
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performance.
performance management
Randstad has an extensive performance management
system in place. Performance management at Randstad
starts at the lowest level in our organization in the
context of what we call 'activity-based field steering'
(ABFS). Our ABFS model requires our units and teams to
translate commercial goals (active clients, people at
work) into actual activities on a daily basis. As our
planning and control cycle is operationally driven, the
data acquired through ABFS drives action right up to the
Executive Board level. As a result, Executive Board
members are closely involved with the operating
companies under their responsibility.
Each month, the Executive Board discusses
performance with the management team of each
operating company. The agenda includes financial and
operational performance, forecasts, risk management,
and the progress made in achieving strategic goals.
Internal and external benchmarks are used to challenge
performance and to identify points for improvement. In
addition to the monthly control cycle, a yearly strategic
planning cycle takes place in the spring, and an
operational planning cycle takes place in the fall. The
planning and control cycle is embedded in our Risk &
Control framework.
key performance indicators
Our day-to-day performance overview includes key
performance indicators (KPIs) showing our growth,
productivity, profitability, working capital, and cash
flow. We use a variety of tools within our planning and
control cycle to assess our performance and align future
strategic and investment decisions to best utilize
commercial and organizational opportunities. KPIs are
used to measure and monitor performance against
budgets, forecasts, the previous year, and our strategic
targets. These indicators are described in the table
below.
weekly
indicators
Weekly volumes of employees working are an important indicator within our field steering model and measure the
success of the units and teams. In addition, we track weekly information on permanent placements.
market share
Gaining profitable market share is an important strategic target. Where possible, we aim to measure market shares at the
lowest possible level (units and teams).
profitability
Profitability indicates the quality of our top line and operational efficiency, maintaining our overall financial goal to
achieve an EBITA margin of 5% to 6% over time.
productivity
Productivity improvements are important in helping us to achieve our profitability targets. We measure productivity in
three ways: gross profit per staff member (GP/FTE), gross profit in relation to personnel expenses (GP/PE), and the
number of candidates per staff member (Temps/FTE).
working
capital
There is a strong focus within Randstad on Days Sales Outstanding (DSO), the amount of overdues, and working capital.
This focus is also reflected in the bonus targets set for our senior management. Within working capital, the 'trade
receivables' component is the most important for us to influence. Our liabilities comprise mainly wage tax and social
security payments to tax authorities.
financial
position
To maintain a solid financial position, we monitor our leverage ratio (net debt divided by 12-month EBITDA). This is used
as guidance for our new capital allocation policy, which we explain in detail in 'our value for investors'. Strategically, our
target range is between 0 and 2, while our bank covenants allow for 3.5. In certain cases, we are now allowed to report
to a maximum leverage ratio of 4.25x EBITDA for a limited amount of time.
cash flow
generation
Free cash flow includes operating profit and movements in working capital plus capital expenditure. In a normal year,
our free cash flow moves in line with the seasonal pattern in our business. In the first half of the year, the free cash flow
is normally lower, as working capital requirements increase in line with higher revenue and the payment of holiday
allowances in Belgium and the Netherlands. In the second half of the year, free cash flow is normally higher, based on
higher revenue and profit, while in a downturn, we typically see significant unwinding of working capital.
# of candidates
working
In order to determine our success across the various markets in which we operate, we monitor the number of candidates
we place with our clients. See the graph 'candidates working split by geography' for more details.
# of permanent
placements
Permanent placements have become a significant part of our daily work. The table 'number of permanent placements'
reflects these numbers, broken down by geography.
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performance.
free cash flow development
in millions of €
2015
2016
2017
Q1
Q2
Q3
Q4
-200
-100
0
100
200
300
400
number of permanent placements
2017
2016
North America
23,100
21,600
Netherlands
6,000
6,400
France
57,300
42,200
Germany
5,000
4,000
Belgium & Luxembourg
4,200
3,300
Iberia
22,200
24,600
Italy
7,800
6,000
Other European countries
18,200
16,500
Rest of the world
27,000
29,200
Global businesses
41,400
30,100
Group
212,200
183,900
candidates working split by geography
as a % of total number of candidates working per day
18%
16%
15%
13%
13%
12%
12%
12%
13%
8%
8%
7%
7%
7%
7%
10%
10%
10%
3%
5%
7%
10%
10%
10%
19%
18%
17%
1%
2%
north america
iberia
netherlands
italy
france
other european countries
germany
rest of the world
belgium & luxembourg
global businesses
2015
Total: 597,400
2016
Total: 626,300
2017
Total: 668,800
0
100
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performance.
financial performance
income statement
For a meaningful analysis of our results, we need to look
at the underlying results, which excludes the impact of
foreign exchange movements, mergers and
acquisitions, and one-off items such as restructuring
costs and integration costs.
income statement, underlying
2017
2016
organic ∆
Revenue
23,272.8
20,684.1
8%1
Cost of services
18,564.9
16,749.9
Gross profit
4,707.9
3,934.2
7%
Personnel expenses
2,676.8
2,251.5 2
Other expenses
965.8
736.0
Operating expenses
3,642.6
2,987.5
5%2
EBITA, underlying
1,065.3
946.7
11%2
Gross margin
20.2%
19.0%
Operating expenses
margin
15.7%
14.4%
EBITA margin
4.6%
4.6%
1 Including Monster as of November 1, 2017.
2 Excluding Monster, for reasons of comparison.
revenue
At Group level, organic revenue (including Monster as
of November 1) increased 8.3% in 2017 (2016: 4.7%).
Currency effects and working days had a negative
impact of 0.9% and 0.6% respectively, while M&A
contributed 5.7%. Overall reported revenue for the year
increased 12.5% to € 23,273 million. Our European
operations grew 10% in 2017 (2016: up 6%), North
America grew 1% (2016: up 1%), Asia grew 7% (2016: up
5%), and Latin America grew 20% (2016: up 15%). More
detailed information is included in the section 'country
performance'. More information about the four main
revenue categories (Staffing, Inhouse Services,
Professionals, and Global Businesses) can be found in
this section under 'performance by revenue category'.
Permanent placements were up 10% (2016: up 7%) and
made up 2.0% of revenue (2016: 2.0%). Revenue from
temporary billing increased by 7% organically (2016: up
5%)
Annually, we employ more than two million people, and
we made around 212,200 permanent placements in
2017.
organic revenue growth per working day
in %
Q1
Q2
Q3
Q4
full year
Geographic areas
North America
1
1
0
1
1
Netherlands
1
2
1
3
2
France
9
14
14
12
12
Germany
9
9
10
10
9
Belgium & Luxembourg
10
14
9
10
11
Iberia
8
16
14
15
13
Italy
23
29
27
26
26
Other European
countries
5
11
13
12
10
Rest of the world
9
12
10
10
10
Revenue categories
Staffing
4
7
6
6
6
Inhouse Services
15
20
19
18
18
Professionals
3
4
5
6
4
Global businesses1
16
11
17
7
11
Group1
6
9
9
9
8
1 Including Monster in Q4 and full year, 2017.
year-on-year organic growth
in %
temp revenue
perm revenue
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2015
2016
2017
0%
5%
10%
15%
20%
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performance.
gross profit
Gross profit reflects our effectiveness in pricing, cost of
employee benefits, and idle-time management. In 2017,
gross profit amounted to € 4,708 million, an organic
increase of 7% compared to the previous year (2016: up
4%). Gross margin increased 120bp to 20.2%, driven by
the Monster acquisition. Excluding Monster, gross
margin remained stable year-on-year at 18.7%. Note 5 to
the financial statements includes an overview of the
actual reported gross profit per geography.
change in gross margin
19.0%
(0.3)%
0.0%
1.6%
20.2%
2016
temp margin
perm fees
HRS/other
2017
17%
18%
19%
20%
21%
Our temp margin decreased 30bp compared to last year
due to adverse mix effects and pricing. Permanent
placements had no impact, while HR Solutions had a
positive impact of 160bp driven by the Monster
acquisition. At Group level, the contribution from
permanent placements ('perm fees') made up 9.6%
(2016: 10.4%) of gross profit.
In order to realize our EBITA margin targets, we aim to
maximize conversion of gross profit into EBITA. In 2017,
we converted 23% of gross profit into EBITA.
productivity
As explained in the section 'performance management',
productivity improvements are key to achieving our
profitability targets. We measure productivity in three
ways:
• Gross profit per staff member (GP/FTE);
• Gross profit in relation to personnel expenses (GP/PE);
• Number of candidates per staff member (Temps/FTE).
productivity, indexed
2007 = 100
GP/FTE
GP/PE
temps/FTE
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2014
2015
2016
2017
80
90
100
110
120
130
Productivity (GP/FTE) was organically up 3% in 2017
(2016: flat). We aim to focus on achieving greater
efficiencies across the organization, mainly through
better execution based on field steering and the
implementation of the right delivery models for our
clients.
gross margin, conversion ratio and EBITA margin
gross margin
conversion ratio¹
EBITA margin
2013
2014
2015
2016
2017
15%
20%
25%
30%
3%
4%
5%
6%
1 EBITA as percentage of gross profit.
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performance.
operating expenses
A breakdown of operating expenses is shown in the
table 'operating expenses'. These expenses reflect the
costs related to our sales and delivery organization, as
well as our head offices.
operating expenses
2017
2016
Personnel expenses
2,676.8
2,251.5
Advertising and marketing
227.6
129.5
Accommodation costs
226.5
196.2
Other operating expenses
429.4
341.0
Depreciation and amortization of PPE
and software
82.3
69.3
Operating expenses, underlying
3,642.6
2,987.5
Average number of corporate
employees
37,930
32,280
Number of branches, year-end
2,900
2,974
Number of inhouse locations, year-end
1,958
1,778
In 2017, underlying operating expenses amounted to
€ 3,643 million, up 5% organically. Foreign exchange
effects decreased our cost base by € 33 million. Actual
operating expenses in 2017 included € 69 million related
to restructuring, integration and acquisition-related
expenses (2016: € 55 million).
Personnel expenses increased by 6% organically. We
invested in areas where growth continued, such as in the
United States (Staffing), France, Germany and Italy.
Personnel expenses per FTE were slightly higher
compared to 2016, due to growth in our more developed
markets. An overview of corporate staff by region is
given in the section 'country performance'. Further
details on actual personnel expenses can be found in
note 9 to the financial statements.
Marketing costs were 1.0% of revenue (2016: 0.6%), also
reflecting the Monster acquisition. Further information
about our marketing strategy is included in the section
'our value for our clients and candidates'.
Accommodation costs fell by 1% organically. Across the
board, we continued to consolidate branches, without
leaving markets. As we continued to see strong demand
for Inhouse Services, we opened 180 new Inhouse
locations in 2017 (2016: 55), most notably in the
Netherlands and Germany. At the end of 2017, we were
operating a network of 2,900 branches, down 2% year-
on-year (mainly related to the Netherlands and Italy) and
1,958 Inhouse locations (up 10%).
Other operating expenses − mainly IT and general costs
− increased organically by 4%. IT costs generally
contract and expand with our capacity. General costs,
which mainly consist of office supplies and consultancy
costs, decreased in line with our focus on cost control.
Depreciation and amortization charges were higher than
in 2016 due to the impact of M&A. On average, we
depreciate assets over three to five years.
branches and inhouse locations, year-end
2017
2016
branches
inhouse
locations branches
inhouse
locations
North America
671
440
673
419
Netherlands
267
383
297
337
France
435
234
452
211
Germany
275
307
273
277
Belgium & Luxembourg
148
169
148
155
Iberia
230
124
230
109
Italy
247
28
290
23
Other European countries
277
186
273
163
Rest of the world
216
86
216
83
Global businesses
134
1
122
1
2,900
1,958
2,974
1,778
operating expenses
operating expenses: € 3,642.6
73%
6%
6%
12%
2%
personnel
accommodation
depreciation
marketing
other (IT, 3rd party, etc)
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performance.
EBITA
Underlying EBITA increased to € 1,065 million,
compared to € 947 million in 2016. EBITA margin
remained stable at 4.6% for the Group. Excluding the
effect on EBITA of recent acquisitions (mainly Monster,
Ausy and BMC), EBITA margin would have been 4.7%.
Currency effects had a negative impact on EBITA of
€ 9 million.
EBITA development, underlying
in millions of €
EBITA (€ million)
EBITA margin
2015
2016
2017
0
250
500
750
1,000
1,250
4%
4.5%
5%
5.5%
EBITA
in millions of €
2017
2016
∆%
EBITA, underlying
1,065.3
946.7
13%
Integration costs & one-offs
(71.6)
(54.7)
EBITA, actual
993.7
892.0
11%
Amortization and impairment of
intangible assets and goodwill
(134.0)
(101.4)
Operating profit
859.7
790.6
9%
Net finance costs
(22.5)
(3.8)
Share in profit/(loss) of associates
1.2
(0.8)
Income before taxes
838.4
786.0
Taxes on income
(207.0)
(197.8)
Net income
631.4
588.2
7%
As explained in the section 'performance management',
we measure the conversion of gross profit into EBITA. If
we grow, our target is to convert 40%-50% of
incremental gross profit into EBITA (incremental
conversion ratio). If our gross profit declines, our target
is to achieve cost savings of at least 50% of lost gross
profit (recovery ratio). For the Group as a whole, the
incremental conversion ratio was 40% for full-year 2017
(2016: 41%), which included digital investments.
incremental conversion ratio
europe
north america
group
2014
2015
2016
2017
0%
50%
100%
150%
Target:
- incremental conversion ratio: 40% - 50%
- recovery ratio: 50%
amortization of intangible assets, and
impairment of goodwill
Acquisition-related intangible assets are capitalized in
the balance sheet upon acquisition of companies and
reflect the value that is allocated to assets, such as brand
names, customer relationships, and candidate profiles.
These intangibles are amortized over a period of one to
ten years. The amortization charge in 2017 of
€ 134 million was higher than the charge of € 101 million
in 2016. The increase mainly reflects the impact of
acquisitions at the end of 2016 and early 2017. For more
information, see note 4.1 and note 15 to the financial
statements.
operating profit
Operating profit is EBITA minus the non-cash
amortization and impairment charges of acquisition-
related intangible assets and goodwill. Operating profit
was € 860 million, up by € 69 million compared to 2016,
representing an 8.7% increase.
net finance costs
Net finance costs amounted to € 23 million, compared
to € 4 million in 2016. Net finance costs include net
interest expenses on our net debt position, as well as
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performance.
foreign currency effects and adjustments in the
valuation of certain assets and liabilities. Interest
expenses on our net debt position amounted to
€ 20 million (2016: € 15 million) and increased due to a
higher net debt position during the year, as a result of
our cash outflow for acquisitions at the end of 2016 and
early 2017. Foreign currency losses were € 6 million
(2016: € 4 million foreign currency gains). The remaining
part of net finance costs of € 3 million positive (2016:
€ 7 million positive) is mainly related to adjustments in
the valuation of certain assets and liabilities. For further
information, see note 10 to the financial statements.
taxes on income
The effective tax rate before amortization and
impairment of acquisition-related intangible assets and
goodwill, integration costs and one-offs, was 26.4% in
2017 (2016: 26.0%). The actual effective tax rate in 2017
was 24.7% (2016: 25.1%). The change was mainly driven
by a different country mix in taxable profits/losses in
countries with different corporate tax rates. Towards the
end of the year, tax reforms in various countries (mainly
the US and France) were enacted. The effects for the
Group on the effective tax rate in 2017 were limited and
were offset by a lower than expected average nominal
tax rate and some other incidental items. More
information on the actual effective tax rate is given in
note 4.3 to the financial statements.
net income, earnings per share and
dividend
Adjusted net income for holders of ordinary shares
amounted to € 756 million (2016: € 689 million).
Underlying basic EPS increased by 10% to € 4.13 (2016:
€ 3.77). The average number of (diluted) outstanding
ordinary shares remained virtually stable.
In line with the proposed adjustment of our dividend
policy, we will propose the payment of an all-cash
dividend of € 2.76 per ordinary share (2016: € 1.89). This
consists of a regular dividend of € 2.07 based on a
payout ratio of 50%, and a special dividend of € 0.69.
Our dividend proposal is further elaborated on in the
section ‘our value for investors’.
net income, earnings per share and dividend
2017
2016
Net income
631.4
588.2
Net income for non-controlling interests
0.0
0.2
Net income for holders of preference
shares
12.6
12.6
Net income for holders of ordinary
shares
618.8
575.4
Amortization of acquisition-related
intangible assets and impairment of
goodwill
134.0
101.4
Integration costs and one-offs
71.6
54.7
Tax effect on amortization, integration
costs and one-offs
(68.1)
(42.6)
Net income for holders of ordinary
shares, adjusted
756.3
688.9
Basic EPS (€)
3.38
3.15
Underlying basic EPS (€)
4.13
3.77
Underlying diluted EPS (€)
4.11
3.75
Proposed dividend (€)
2.76
1.89
Payout ratio (% of underlying basic EPS)
67
50
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performance.
invested capital
As at December 31, 2017, our invested capital amounted
to € 5.3 billion (2016: € 4.9 billion). The primary
components of our invested capital, as shown in the
overview below, are goodwill and acquisition-related
intangible assets, and operating working capital. The
remaining parts are 'net tax assets' and 'all other assets/
liabilities'. Return on invested capital increased to 16.7%
(2016: 15.9%).
invested capital
2017
2016
Goodwill and intangible assets
3,475.5
3,286.3
Trade and other receivables1
4,577.7
4,104.3
Trade and other payables2
3,688.3
3,392.2
Operating working capital
889.4
712.1
Net tax assets3
356.8
479.6
Other assets/(liabilities)4
555.7
456.2
Invested capital
5,277.4
4,934.2
Financed by
Total equity
4,251.7
4,140.8
Net debt
1,025.7
793.4
Invested capital
5,277.4
4,934.2
Ratios
DSO (Days Sales Outstanding, moving average)
53.2
51.4
Operating working capital as % of revenue
3.8%
3.4%
Leverage ratio (net debt/EBITDA)
0.9
0.8
Return on invested capital5
16.7%
15.9%
1 Trade and other receivables minus the current part of financial fixed assets,
deferred receipts from disposed Group companies and interest receivable.
2 Trade and other payables minus interest payable.
3 Net tax assets: deferred income tax assets and income tax receivables less
deferred income tax liabilities and income tax liabilities.
4 All other assets/liabilities mainly containing property, plant, equipment and
software plus financial assets and associates, less provisions and employee
benefit obligations and other liabilities.
5 Return on invested capital: underlying EBITA less income tax paid as a percentage
of invested capital.
operating working capital
During the year, we continued our focus on working
capital management, paying special attention to the
collection of trade receivables and the reduction of
overdues. Trade receivables grew along with revenue
growth. As a percentage of revenue, working capital was
3.8% (2016: 3.4%). Within working capital, the
component we most need to be able to influence is trade
receivables. Our DSO increased to 53.2 days (2016:
51.4), primarily due the higher DSO of acquired
companies (mainly Ausy and Obiettivo Lavoro) and
adverse mix effects (faster sales growth in countries with
above-average DSO). We aim to realize further
improvements by focusing on the aging of trade
receivables, including payment terms and overdues.
Our exposure to bad debt remained limited, amounting
to only 0.2% of revenue (2016: 0.3%). Our trade
receivables portfolio is very diversified geographically,
in terms of both segmentation and client base, which
mitigates credit risk. Current liabilities mainly comprise
liabilities such as wage tax, social security charges, and
pensions, for which payment terms are determined by
law and therefore difficult to change.
all other assets and liabilities
For purposes of analyzing our invested capital, we have
grouped various other assets and liabilities. See
footnote 4 of the invested capital table for a description
of the composing elements. The increase in this group
of invested capital year-on-year (€ 556 million,
compared to € 456 million in 2016) is mainly caused by
the increase of the CICE receivable, which arises from
tax credits for our French subsidiaries under the French
Competitive Employment Act. The increase amounts to
€ 90 million and is the combined effect of credits for the
year 2017 (€ 145 million) and the effect of acquired
companies (€ 15 million), minus the refunded credits for
the year 2013 ( € 70 million). These tax credits can be
offset against the income tax liability with respect to the
calendar year to which the wages (based on which the
tax credit is calculated) relate. Any excess credit can be
carried forward and offset against the tax liability in the
next three years. Any excess after three years will be
refunded. In the second half of 2018, a further refund is
expected to the amount of € 99 million.
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performance.
net debt
Our net debt position increased by € 232 million to
€ 1,026 million. Free cash flow of € 586 million (up
€ 121 million compared to 2016) did not outweigh our
cash outflow with regard to acquisitions (€ 465 million)
and dividends paid (€ 359 million). The leverage ratio
(net debt divided by 12-month EBITDA) was 0.9 at year-
end. This is well within our targeted range of between 0
and 2. The section 'performance management’ contains
an overview of the development of net debt and the
leverage ratio.
net debt
2017
2016
Cash and cash equivalents
326.3
385.8
Less: Non-current borrowings
639.5
699.2
Less: Current borrowings1
712.5
480.0
Net debt
1,025.7
793.4
Leverage ratio
0.9
0.8
1 The 2016 amount includes the short-term part of non-current borrowings.
As at December 31, 2017, the Group had a € 1,850 million
committed multi-currency syndicated revolving credit
facility at its disposal (2016: € 1,920 million), which
matures in July 2022 (2016: July 2021). In 2017, the Group
renewed its multi-currency syndicated revolving credit
facility. The facility agreement contains a covenant with
respect to the net debt to EBITDA ratio (leverage ratio),
as well as a paragraph on material adverse changes; the
net debt to EBITDA ratio has a limit of 3.5, and is
calculated based on the results of the Group on a 12-
month basis. In certain cases, Randstad is allowed to
report a net debt to EBITDA ratio of 4.25x EBITDA for a
limited period of time.
As at December 31, 2017, drawings on this credit facility
amounted to € 490 million.
The Group recently issued a privately placed German
promissory note (‘Schuldschein’), and successfully
raised € 150 million, with a maximum three-year tenor.
This promissory note ultimately matures in December
2020, and bears an interest that is based on 6-month
Euribor (with a floor of zero) increased by a fixed margin
of 0.45% per annum, payable in June and December of
each year. Covenants are fully aligned with the
committed multi-currency syndicated revolving credit
facility.
net debt and leverage ratio development
in millions of €
net debt (x € million)
leverage ratio
2015
2016
2017
0
100
200
300
400
500
600
700
800
900
1,000
0
0.5
1
1.5
2
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performance.
cash flow analysis
free cash flow
Free cash flow amounted to € 586 million (2016:
€ 465 million). The increase in free cash flow is mainly
caused by an increase in EBITA and the CICE cash-in
related to 2013. Operating working capital requirements
resulted in an outflow of € 175 million (2016:
€ 170 million), driven by the funding of our organic sales
growth. Capital expenditures in 2017 amounted to
€ 96 million (including the full-year consolidation of
Monster), comparable to 2016. Whereas in 2016 the
refurbishment of our head office in the Netherlands
(€ 11 million) was a main driver of capital expenditures,
in 2017, capital expenditures were mainly driven by
investments in software.
For more details on this topic, see the 'consolidated
statement of cash flows' in the financial statements.
performance by revenue
category
In this section, we provide an overview of the underlying
performance per revenue category in 2017. More
detailed information on our service concepts can be
found in the section 'our value for clients and
candidates'. In our financial reporting, we have merged
these service concepts into four revenue categories:
Staffing, Inhouse Services, Professionals and Global
Businesses.
split by revenue category
revenue 2017: € 23,273 million
EBITA 2017: € 1,065 million
53%
22%
20%
5%
54%
22%
24%
staffing
professionals
inhouse services
global businesses
staffing
Within Staffing, we serve clients in the industrial
segment (blue-collar) and administrative segment
(white-collar). In our revenue mix, this is about 50:50.
One of our priorities has been to achieve a greater share
of permanent placements in our Staffing businesses. In
2017, we continued our progress in this regard, with
permanent placements increasing proportionately, with
growth of 16% in the year (excluding RPO).
staffing
in millions of €
2017
2016
organic ∆%
Revenue
12,184.0
11,400.2
6%
EBITA
622.7
547.3
11%
EBITA margin
5.1%
4.8%
consolidated cash flow statement
in millions of €
2017
2016
EBITA, actual
993.7
892.0
Depreciation, amortization and
impairment of property, plant and
equipment and software
86.9
74.1
EBITDA
1,080.6
966.1
Working capital
(175.2)
(169.5)
Provisions and all other items
(31.1)
(77.1)
Income taxes paid
(186.2)
(159.8)
Net cash flow from operating activities
688.1
559.7
Net capital expenditures1
(95.7)
(94.0)
Financial receivables
(6.8)
(1.1)
Free cash flow
585.6
464.6
Net acquisitions and disposals2
(356.2)
(580.7)
Non-current borrowings in acquired
companies
(106.5)
(128.3)
Issue of ordinary shares
1.1
0.1
Purchase of own shares
(38.6)
(35.8)
Dividend paid on ordinary shares
(346.3)
(307.2)
Dividend paid on preference shares
(12.6)
(12.6)
Dividend received associates
1.3
-
Net finance costs
(17.7)
(11.8)
Translation and other effects
57.6
(8.5)
Net (increase) of net debt
(232.3)
(620.2)
1 Net additions in property, plant and equipment and software.
2 Net acquisitions and disposals of subsidiaries/activities, associates and equity
investments.
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performance.
inhouse services
Inhouse Services continued to see sound growth in
2017. Revenue grew by 18% to € 5.2 billion, as we
continued to align clients to the most appropriate
delivery model.
inhouse services
in millions of €
2017
2016
organic ∆%
Revenue
5,185.4
4,460.5
18%
EBITA
250.8
223.1
13%
EBITA margin
4.8%
5.0%
revenue from inhouse services
3,224
3,623
4,216
4,461
5,185
19
21
22
22
22
revenue from inhouse services (x € mln)
percentage of total revenue
2013
2014
2015
2016
2017
1,000
2,000
3,000
4,000
5,000
6,000
10%
20%
30%
40%
professionals
Revenue in Professionals was organically 4% higher
year-on-year. Perm fees were 6% ahead of last year.
EBITA margin increased by 40bp year-on-year to 5.9%,
partially driven by the acquisition of Ausy.
Our Professionals business strengthened its operations
based on industry sectors (verticals). The use of verticals
strengthens our position in the Professionals segment,
with strong verticals apparent in IT, Finance, Healthcare,
and Construction/Engineering.
professionals
in millions of €
2017
2016
organic ∆%
Revenue
4,719.7
4,066.9
4%
EBITA
276.3
225.6
6%
EBITA margin
5.9%
5.5%
global businesses
Global Businesses consists of Monster, Randstad
Sourceright (RSR), RiseSmart and twago. Revenue was
up by 11% year-on-year, mainly driven by Randstad
Sourceright. Monster sales was down by 16%. Overall
EBITA margin was -0.2%, compared to 2.6% last year,
reflecting continued investments related to our digital
strategy, including Monster.
global businesses
in millions of €
2017
2016
organic ∆%
Revenue
1,183.7
756.5
11%
EBITA
(2.3)
19.6
36%
EBITA margin
(0.2%)
2.6%
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performance.
country performance
introduction
Randstad operates in 39 countries, representing more
than 90% of the global HR services market. This is not
likely to change much, as we believe our current
network covers the most attractive geographies. In this
section, we provide an overview of our underlying
performance in our largest countries in 2017.
Figures relating to Global Businesses are not included in
individual countries' results. These are reported
separately under the Global Businesses revenue
category.
main market positions, 20171
markets
market
growth
market
share
market
position
United States
3%
3%
2
Netherlands
6%
18%
1
France
11%
16%
3
Germany
7%
9%
1
Belgium & Luxembourg
8%
24%
1
Spain
12%
31%
1
Italy
23%
14%
2
1 Based on country data, 2017 figures, and SIA estimated growth rates.
north america
in millions of €
2017
2016
organic ∆%
Revenue
4,230.5
4,244.6
1%
EBITA
235.9
239.1
0%
EBITA margin
5.6%
5.6%
In 2017, sales in North America increased 1%, with
continuous focus on profitability through pricing
discipline and cost control. EBITA margin remained
stable at 5.6% in 2017.
united states
US revenue remained flat. US Staffing and Inhouse
Services recognized full-year growth of 2% in revenue,
while perm within our Staffing and Inhouse Services
business grew 10%. Revenue growth in US Professionals
was down 2%, while IT revenues saw an improving trend
during the year, growing by 3%. This was offset by
declines in F&A and other professional lines of
business.The US staffing market continues to suffer from
scarcity of labor supply, while temporary staffing
penetration reached a new peak level of above 2%.
Randstad US digital investments in data-driven sales and
talent acquisitions remain a strong focus.
canada
Randstad Canada achieved excellent growth year-on-
year. Revenue increased 8%, recognizing 20% growth in
perm, leading to a significant increase in profitability.
development in the main geographic markets
in millions of €, unless otherwise indicate
revenue
organic
growth
average candidates
average corporate staff
2017
2016
2017
2016
2017
2016
North America
4,230.5
4,244.6
1%
100,900
101,700
5,720
5,410
Netherlands
3,333.9
3,172.3
2%
81,800
82,500
4,230
4,170
France
3,627.0
3,043.6
12%
86,600
78,200
4,140
3,520
Germany
2,335.1
2,082.7
9%
49,500
47,000
2,740
2,610
Belgium & Luxembourg
1,568.6
1,370.1
11%
45,600
41,900
2,070
1,900
Iberia
1,427.4
1,275.1
13%
68,400
63,200
2,030
1,870
Italy
1,504.1
1,006.2
26%
47,400
30,400
2,090
1,680
Other European countries
2,151.2
1,983.5
10%
66,600
62,800
3,810
3,640
Rest of the world
1,911.3
1,749.5
10%
111,300
109,900
5,000
4,980
Global businesses
1,183.7
756.5
11%
10,700
8,700
5,880
2,300
Corporate
n.a.
n.a.
n.a.
n.a.
n.a.
220
200
Group
23,272.8
20,684.1
8%
668,800
626,300
37,930
32,280
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performance.
the netherlands
in millions of €
2017
2016
organic ∆%
Revenue
3,333.9
3,172.3
2%
EBITA
201.7
188.4
1%
EBITA margin
6.0%
5.9%
In the Netherlands, where Randstad is the market leader,
revenue grew 2% organically. Our EBITA margin
increased 10bp to 6.0%, and perm fees increased 12%.
The market remained competitive, and in order to
protect our profitability we grew at a slightly slower pace
than the Dutch market.
Our combined Staffing and Inhouse Services revenues
(represented by the Randstad and Tempo-Team brands)
increased 2%. Our Professionals business (primarily
Yacht) grew organically by 3%, and was further
positively impacted by the acquisition of BMC, focused
on consultancy and secondment in the public sector.
france
in millions of €
2017
2016
organic ∆%
Revenue
3,627.0
3,043.6
12%
EBITA
221.0
169.1
23%
EBITA margin
6.1%
5.6%
Our revenue grew by 12% in France, slightly ahead of the
market. Our EBITA margin increased to 6.1%, an
improvement of 50bp compared to 5.6% in 2016.
Increasing market share while consolidating higher
profitability levels was Randstad's primary goal in France
throughout 2017. Our combined Staffing and Inhouse
Services revenues grew by 11%, and we achieved 18%
growth in Professionals. Overall revenue from
permanent placements grew by 39% in 2017 across all
business lines, with Professionals placements
increasing by 40%, helped by our big data tool 'Starter'.
The 18% growth in Professionals was driven by a very
strong performance from our Expectra brand (20%
growth), as well as another good year for our Healthcare
services (up 17%). Our focus on applying our Tech &
Touch strategy to better serve our SME clients also paid
off, with our retail accounts growing at twice the rate of
our large accounts in 2016.
germany
in millions of €
2017
2016
organic ∆%
Revenue
2,335.1
2,082.7
9%
EBITA
112.4
100.2
6%
EBITA margin
4.8%
4.8%
In Germany, our overall revenue increased 9%
compared to the previous year, ahead of the market.
Underlying EBITA margin reached 4.8%, flat compared
to 2016 and impacted by more bank holidays. We
prepared the organization for the change in terms of
equal pay and the maximum length of assignments of 18
months.
In Staffing and Inhouse Services (where we operate as
Randstad and Tempo-Team), we grew by 9%. Our
Inhouse Services grew 14%. Our continued efforts in
Staffing to improve our business mix paid off, and we
managed to both increase our SME business and
continue to grow in permanent placements (33%).
Revenue of the combined Professionals businesses
increased by 11%.
belgium & luxembourg
in millions of €
2017
2016
organic ∆%
Revenue
1,568.6
1,370.1
11%
EBITA
99.1
87.5
6%
EBITA margin
6.3%
6.4%
Randstad reinforced its market leadership in Staffing,
Outplacement services and Professionals in Belgium
and Luxembourg in 2017. The market recorded 8%
growth in the year, while our revenue grew by 11%. The
combined Staffing and Inhouse Services businesses
(where we operate as Randstad and Tempo-Team)
reported 10% topline growth. EBITA margin was broadly
stable at 6.3%, thanks to a continued focus on client
profitability.
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performance.
iberia
in millions of €
2017
2016
organic ∆%
Revenue
1,427.4
1,275.1
13%
EBITA
73.3
59.7
23%
EBITA margin
5.1%
4.7%
Revenue growth in our Iberian business was 13%, with
EBITA margin reaching 5.1%, compared to 4.7% in 2016.
We are market leader in both Spain and Portugal.
spain
Spain enjoyed another strong year in 2017 (revenue up
15%). This was due to the underlying improvement in the
economy and labor market, as well as our relentless
focus on client profitability, internal productivity, and
risk control. Our Staffing business grew by 15%, and
Inhouse Services by 14%. Our decision to continue to
invest in the Professionals business has paid off, as we
are now clearly one of the top 3 Professionals players in
Spain, with revenues increasing 23% in 2017.
portugal
Overall revenue increased by 8% compared to 2016.
Strong growth was achieved in the contact center
business, and our Professionals business also had a
good year, with continued growth in permanent
placements. The combined Staffing and Inhouse
Services businesses grew by 9% compared to the
previous year.
italy
in millions of €
2017
2016
organic ∆%
Revenue
1,504.1
1,006.2
26%
EBITA
86.4
52.8
38%
EBITA margin
5.7%
5.2%
Italy had a record year, in which we successfully
integrated the Obiettivo Lavoro business acquired in
2016. We were able to keep the growth momentum and
further improve our profitability. Overall revenue
increased by 26% (compared to 16% in 2016). Permanent
placements were up by 16% and our Professionals
business even grew by 35%. Our EBITA margin improved
from 5.2% to 5.7%.
other european countries
in millions of €
2017
2016
organic ∆%
Revenue
2,151.2
1,983.5
10%
EBITA
64.0
62.0
6%
EBITA margin
3.0%
3.1%
Revenue growth for 'other European countries' was 10%
in 2017, while EBITA margin remained broadly stable at
3.0%.
united kingdom
In the United Kingdom, revenue was up by 4% in 2017
compared to 1% in 2016. Our Staffing & Inhouse Services
business grew by 13% while Professionals business
remained flat compared to 2016. Perm was down 5%
(2016: down 4%), reflecting tough market conditions.
poland
In Poland, we again had a strong year, growing 11%.
Market conditions remained tough, due to scarcity of
candidates.
nordics
In the Nordics, we successfully completed the
integration of Proffice during 2017, and we saw 10%
revenue growth in our combined businesses. In
Sweden, overall revenue increased by 10% compared to
2016, driven by increased demand in large clients. In
Norway, we grew 10%, partly driven by strong
performance in permanent placements. In Denmark we
grew 10% and recorded an all-time high level of
profitability.
switzerland
With 21% sales growth, we outperformed the Swiss
market for the seventh consecutive year, with a
significant further improvement of our profitability.
austria
In Austria, we grew by 11%, in line with the market.
hungary, turkey, czech republic, greece, and
romania
In Hungary, where we are a strong leader in perm, we
had another very successful year, growing our Randstad
business by 32%. In the Czech Republic, we grew the
business by 6% organically. In Turkey, we had an
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performance.
excellent year given the turbulent political situation in
the country, keeping our revenues flat while further
improving our profitability. Randstad also had a good
year in Greece, where we grew 8%, which was well
ahead of the market. Romania was added to Randstad's
country portfolio through the Obiettivo Lavoro
acquisition.
rest of the world
in millions of €
2017
2016
organic ∆%
Revenue
1,911.3
1,749.5
10%
EBITA
56.0
37.2
46%
EBITA margin
2.9%
2.1%
Revenue in the 'rest of the world' region grew by 10%
organically. EBITA margin improved markedly from 2.1%
to 2.9%.
japan
In the course of 2017, we saw accelerating trends across
the business in Japan. Overall, revenue grew by 7% year-
on-year, with white-collar staffing returning back to
growth and ongoing solid growth trends in our blue-
collar business. Permanent placements for both entry-
level jobs and Professionals achieved double-digit
growth with accelerating trends towards the end of the
year. Careo, which was acquired in July 2016, continued
its strong top- and bottom-line trends, outperforming
investment case expectations. The integration of this
acquisition, planned for 2018, is well on track.
australia and new zealand
Operations in Australia continued to show solid growth,
up 11%, while improving profitability on the back of
growth acceleration in our temp business against better
conversions. Within Staffing, our Education business
continued its strong performance, while Commercial
showed the strongest growth in this segment. Our
Professionals divisions performed well across the board,
led by the CPE and HR businesses.
New Zealand operations experienced solid growth of 8%
on the back of solid growth in our temp business.
india
India closed 2017 with revenue up 4% organically. In our
Staffing business, we increased efficiency in delivery by
merging mid- and back-office activities, while gaining
further traction in the Specialties and Technologies
segment. Due to a strong focus on cost effectiveness
and process efficiency, Randstad India became
profitable over the full year of 2017.
china and other asian countries
High single-digit revenue growth of our Chinese
business continued into 2017, with 9% revenue growth
mostly driven by our temporary Staffing and
Outsourcing businesses. The double-digit revenue
growth in our temporary Staffing business was achieved
both through the expansion of business with our
existing nationwide projects and through new client
acquisitions.
revenue split by geography
2017: revenue € 23,273 million
2016: revenue € 20,684 million
18%
14%
16%
10%
7%
6%
7%
9%
8%
5%
20%
15%
15%
10%
7%
6%
5%
10%
8%
4%
north america
iberia
netherlands
italy
france
other european countries
germany
rest of the world
belgium & luxembourg
global businesses
ebita split by geography
2017: EBITA € 1,065 million
2016: EBITA € 947 million
20%
18%
19%
10%
9%
6%
7%
6%
5%
23%
18%
17%
10%
9%
6%
5%
6%
4% 2%
north america
iberia
netherlands
italy
france
other european countries
germany
rest of the world
belgium & luxembourg
global businesses
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performance.
We saw further improvement in our profitability on the
back of strong growth in our permanent placement
business in Hong Kong against better conversions. In
Malaysia, our repositioning strategy towards the
Professionals segment led to double-digit growth,
mainly in the CPE segment, while we also achieved
substantial productivity improvements. Our operations
in Singapore saw another year of strong performance,
with double-digit growth and increased profitability. In
this highly competitive market, we continue to gain
market share in the majority of the segments we operate
in.
latin america
In Latin America, all our businesses continued to show
good progress and delivered profitable growth, while
introducing new concepts and focusing on improved
business processes.
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Risk and opportunity management is essential in helping
us achieve our strategy. While entrepreneurship and
innovation are stimulated throughout the organization,
there are measures in place to define the risk boundaries
and steer activities in the right direction. This section
provides an overview of our Risk & Control framework
and its effectiveness in order to substantiate our Risk &
Control statement.
risk profile
We have wide geographical coverage in both mature
and emerging markets with varying degrees of
regulatory development, market needs and
competition. In addition, as we also engage in
acquisitions, we encounter challenges in harmonizing
culture, business processes, integrating IT systems, and
standardizing reporting requirements.
Randstad's current digital transformation journey is
changing our business models. This impacts our risk
profile. We concentrate innovation in those parts of our
organization where success is most likely. In addition,
we have a dedicated entity, the Randstad Innovation
Fund, to secure access to external innovation.
risk & control management
approach
We manage our risks and opportunities through the
boundaries defined by our risk appetite. Group policies
and frameworks are then developed to support local
management in determining the best approach in light
of local circumstances.
risk & control management approach
global risk & 
control framework
risk appetite
locally 
tailored 
approach
risk appetite
Our risk appetite is derived from our strategy and
priorities, and is broken down into four risk areas:
strategic
We continue to accept moderate risk from M&A
and our focus on digital transformation. Our Tech
& Touch strategy will position us ahead of the
competition, as we leverage technology to
redefine how the industry delivers. Initiatives are
rolled out at both local and global levels to ensure
well-balanced autonomy to take swift action when
new opportunities arise.
operational
We take a reward-balanced approach to
operational risk. Contract pricing, delivery,
productivity, and talent management are
important areas where we have moderate to low
risk tolerance.
finance &
reporting
We maintain a prudent financing strategy, even
when undertaking major acquisitions and
technological investments, and therefore take
calculated risks in this area. Only minimum risk is
accepted in relation to errors in our reporting.
compliance
Adherence to laws and regulations is fundamental
to our role as a corporate citizen in the business
world, as well as being a trusted HR partner.
risk & opportunity management.
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risk & opportunity management.
The table 'Sensitivity analysis' illustrates the impact of
the various changes and trends on our revenue, gross
margin, operating expenses, and currency and interest
rates on our EBITA. Typically, a trend will include a
number of these elements.
risk & control framework
Our global Risk & Control framework is designed to
secure the Group's in-control position. The components
provide Group-wide comfort in terms of control, while
facilitating the flexibility to adapt to local business
circumstances, enabling entrepreneurship and
innovation. The components of the framework are
shown in the Risk & Control framework diagram, which
is based on the COSO internal control framework and
elements from various management and control
models. Factors that we consider in our Risk & Control
framework include the size, service offering, and local
regulatory and market environment of each operating
company.
Operating companies and Holding departments assess
the components of the Risk & Control framework at least
once every six months. The results of these
assessments, including improvement plans, are
discussed by local management, the Group Business
Risk & Audit department, and the Executive Board
member responsible for that country or business line.
Internal audits are executed to evaluate these self-
assessments. Every six months, the Group Business Risk
& Audit department reports to the Executive Board and
the Audit Committee on the state of the Group’s in-
control situation. The Executive Board and Audit
Committee set priorities and provide guidance to
further enhance control throughout the Group.
tone at the top and culture
The tone at the top is derived from our core values,
which are embedded in our leadership style and
determine our culture. Randstad benefits from strong
leadership, built up over 57 years. We have been able to
extensively develop management by example, based on
our core values and business principles.
Upon joining our company, our employees receive a
copy of and training in the business principles and
acknowledge that they will comply with them. Periodic
refresher courses are also in place. These courses also
form a crucial part of our strategy with regard to
integrating acquired companies.
A misconduct reporting procedure is in place, which
enables people to report any suspicion they have of
wrongdoing via a secure phone line or website. All
sensitivity analysis
change
impact
on
assumption FY 2017
Revenue
+/-1%
+/- € 47 million
EBITA
Flat gross margin and no change to cost base
Revenue
+1%
+ € 24 million
EBITA
Flat gross margin and target 40%-50%
conversion (ICR)
Revenue
-1%
- € 24 million
EBITA
Flat gross margin and target 50% recovery (RR)
Gross margin
+/-0,1%
+/- € 23 million
EBITA
Flat revenue and no change to cost base
Gross margin
+0.1%
+ € 12 million
EBITA
Flat revenue and target 40%-50% conversion
(ICR)
Gross margin
-0.1%
- € 12 million
EBITA
Flat revenue and target 50% recovery (RR)
Operating
expenses
+/-1%
+/- € 37 million
EBITA
USD
+/-10%
+/- € 19 million
EBITA
Stable revenue and margin in US
GBP
+/-10%
+/- € 2 million
EBITA
Stable revenue and margin in UK
JPY
+/-10%
+/- € 3 million
EBITA
Stable revenue and margin in Japan
Interest rate
+100 bp
+ € 13 million
Financial charges
Average net debt 2017
Net debt
+/- € 200 million
+/- € 1 million
Financial charges
Stable interest rates
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risk & opportunity management.
complaints were assessed and investigated where
necessary by the local integrity officers and/or the
central integrity officer, together with the Group
Business Risk & Audit department. When deemed
necessary, disciplinary actions and mitigating controls
were put in place. For more details, please see the
paragraph on misconduct reporting under sustainability
basics.
Each year, our Great People Survey is facilitated by an
external provider. This allows us to monitor employees’
engagement, and provides indicators of the tone at the
top in each operating company and at the head office.
The Great People Survey results are reviewed by Group
HR, the Executive Board, and various management
layers. Based on the results, action plans are initiated.
The results are also addressed in appraisal
conversations, as well as in setting our managers' bonus
targets. This type of analysis has proven to be a good
indicator for our company culture.
performance management
Performance management is at the heart of our
organization. The two-year plans and forecasts of our
operating companies are set in accordance with
strategic priorities and market trends. Operating
companies also describe their main risks and
opportunities in their two-year plans.
Our operating companies report on various
performance indicators with regard to financial results,
underlying process activities, and people. By setting
reporting dates, performance indicators, and formats,
as well as including risks and opportunities in our
quarterly management reporting pack, we provide
clarity that enables us to plan ahead, without disrupting
our focus on day-to-day activities. By further combining
this planning and control cycle with our focus on
activity-based field steering, our monitoring systems
have improved, giving more depth to discussions in the
business review meetings. See the section 'performance
management' for more details.
Our Group Corporate Sustainability Reporting
guidelines prescribe detailed performance indicators. In
2017, all reported indicators have been reviewed to
educate their relevance and current performance. The
indicator set has been updated as well as our guidelines.
In 2018, all reporting entities will be trained to report
sustainability data. Additionally, quarterly reviews were
performed for some selected sustainability indicators
reported. These regular performance discussions on all
levels help us adapt our Risk & Control framework to
dynamic local circumstances.
risk & control framework
candidate service concepts 
and best practices determine 
our way of working
client service concepts and 
best practices determine 
our way of working
match
performance management steers our organization
the tone at the top is derived from our core values, which are embedded in our leadership style
risk & control activities  secure our in-control position
reviews and audits give us comfort that our risk & control objectives are realized
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concepts and best practices
Our client and candidate service concepts and best
practices determine our way of working. Our strong
concepts, as described in the section 'Our building
blocks', provide best practices for our core commercial
operations. Our concepts are tailored to local practices
and market conditions. Concept reviews are carried out
to identify, understand, and remediate deviations to
ensure our objectives are realized.
Blueprints describe our operational best practices with
regard to key processes and are used to govern these
processes at local operational level. In addition to the
contract-to-cash, procurement-to-pay and financial
close process blueprints, we will introduce a candidate
screening and filing blueprint in Q1 2018.
We have an extensive framework of Group policies that
cover compliance in multiple areas. These include our
Approval & Information Requirements Policy; Finance
Manual; Competition Compliance Policy;
Discrimination, Intimidation & Harassment Policy;
Bribery, Gifts & Hospitality Policy; Data Protection
Policy; Information Security Policy; and Health & Safety
Policy. In 2017, the Contract Liability Policy was updated
and renamed Contract Approval Policy. In line with our
Tech & Touch strategy, our IT General Control
Framework was introduced in 2017.
risk & control activities
Risk & Control activities secure our in-control position.
Our operating companies compile risk registers semi-
annually. These show the local business risks and
opportunities they may be exposed to, together with
action plans and deadlines to address them. The
aggregated data enable us to get insight into the most
important risks impacting the Group, and their
correlation. The overall consolidated risk profile is
discussed twice a year by the Executive Board and with
the Audit Committee.
Our key control framework contains key operational,
compliance and financial risks, and practical controls to
guide all operating companies. The structure of the key
control framework is organized around Randstad's core
process: the matching of clients and candidates. Every
six months, operating companies perform self-
assessments for the relevant controls in accordance
with the size of their business. The results are
subsequently challenged by the Group Business Risk &
Audit department and evaluated during the audit of the
related process.
The key control framework is updated annually. In 2017,
IT-related controls were refreshed following the
ongoing introduction of the IT General Control Policy.
Our insurance risk program follows the same principles
as our global Risk & Control framework. Insurable risks
are periodically assessed, and Group-wide risks are
either retained or transferred to the insurance market
under our global or local insurance programs. We
regularly review insurable risks and our insurance policy
coverage, as well as the credit ratings of our insurers.
reviews and audits
Reviews and audits reassure us that our Risk & Control
objectives are being realized.
The semi-annual Risk & Control framework assessments
on operating company level lead to a Group-wide in-
control benchmark discussion in meetings of both the
Executive Board and the Audit Committee. In these
discussions, Risk & Control priorities are set, and the
Group Business Risk & Audit plan is updated and agreed.
The annual Group Business Risk & Audit plan is risk-
based. In 2017, the Executive Board identified several
focus areas, such as IT general controls; data protection
and information security; client contract delivery; and
payroll processes.
The Group Business Risk & Audit department leads the
internal audits and collaborates closely with other
Group departments (most commonly Accounting, Legal
and Tax) and the local Risk & Audit functions to cover
the key risks. Findings and recommendations from the
audits are discussed with the operating companies. The
internal audit reports are submitted to the Executive
Board member responsible for that operating company
and to our Group CFO. The progress of the audit action
plans is monitored by local management, the Business
Risk & Audit network, and by the Executive Board.
We have an internal audit manual, which is aligned with
global professional standards. In addition, standard
audit programs are used for key processes such as
pricing and payrolling. 
The global Business Risk & Audit network provides a
platform for sharing best practices, and is a sounding
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board for emerging opportunities, risks, and possible
internal control gaps. The network consists of a cross-
disciplinary team with Business Risk & Audit staff from
the operating companies and the Group Business Risk &
Audit department. Where needed, experts are involved
in audits. For additional reassurance, BDO has been
engaged to perform financial audits in multiple
countries.
In 2017, we detected a few cases of fraud, involving, for
example, the recording of non-existent permanent
placements, and the payment of fictitious flexworkers.
These fraud cases were investigated and, in cooperation
with local management, corrective action was taken.
These cases involved small amounts of money and had
no material impact on the results of the Group. Cases
have been widely communicated internally and were
used to create awareness and improve fraud prevention.
Operating companies submit their in-control statement
semi-annually. This statement certifies that the
corporate policies have been complied with and
explains any exceptions or deviations that have
occurred. The statement forms a cascaded certification,
which assists the Executive Board in determining our in-
control situation as required by the Dutch Financial
Supervision Act.
Deloitte has been appointed to act as our external
auditor from 2015 onwards. In their audit plan, Deloitte
covers all financially significant operations. As such,
these audits are an important supplement to our own
review and audit activities.
The Audit Committee is informed about the results of
both external and internal audits. The role of the Audit
Committee includes monitoring the risk management
and control systems, the quality of the financial
information, and the follow-up of recommendations
made as a result of the audits. More information can be
found in the Report of the Supervisory Board and in the
section 'Corporate governance'.
our main risks
Our main risks are those that threaten the achievement
of the Group’s objectives as well as the in-control
position of the Group over the next three years. The
general risk profile has not changed significantly since
last year. Continuous effort is required to address
evolving strategic and compliance risks.
The first table below depicts the main risks (categorized
into four areas: Strategic, Operational, Financial &
Reporting, and Compliance) that could prevent us from
realizing our financial and non-financial strategic
targets. The table also shows how we address these risks
through the six sections of our strategic road map.
The second table provides a more detailed description
of the main risks in 2017, including the actions taken to
mitigate these risks and any related opportunities. This
list should not be considered exhaustive.
putting the framework into practice
framework component
practical applications to our business
tone at the top
Core values and business
principles
Onboarding training
Great People Survey
Misconduct reporting
procedure
performance
management
Strategic plan and
forecasts
Scenarios and conversion
ratio monitoring
Planning, reporting and
review cycles and
activity-based field
steering (ABFS)
Business review meetings
concepts and best
practices
Strong concepts
(commercial best
practices)
Corporate policies and
procedures
Blueprints (operational
best practices)
Authorization levels
risk & control
activities
Risk register
Key control framework
Risk & Control round
tables
Global insurance program
reviews and audits
Semi-annual Risk &
Control framework
assessments
In-control benchmarks
Internal audits
In-control statement for
each operating company
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our risks related to our strategic targets
strategic roadmap sections1
ABFS
org
TTA
talent tech
M&A
strategic
Changing economic and geopolitical conditions2
Technological disruption
operational
Contract liability and delivery2
Information technology and cyber security2
Talent attraction and retention2
finance & reporting
Credit risk2
compliance
Data protection laws and regulations2
Tax & labor law compliance2
Workplace health & safety compliance
Competition law compliance
1 Activity-based field steering, organizational, total talent architecture, talent management, HR technology, and mergers and acquisitions.
2 Main risks in both 2017 and 2016.
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strategic
risks
current risk-mitigating actions
opportunities
changing economic and
geopolitical conditions
Macroeconomic volatility and geopolitical
uncertainty continue to affect employment
regulations, talent mobility, and consumers'
views on contract employment, as well as
recruitment outsourcing.
With our Tech & Touch strategy, we are embracing
technology to achieve the next phase of growth.
In managing and running local businesses, we adopt a
balanced approach by managing adaptability (recovery
ratio >50%) and maintaining agility, as well as providing
Randstad's unique experience to clients and candidates.
Group policies and key reportings ensure that
boundaries are defined at local level and that
performance is monitored on a timely basis.
The ongoing digital transformation
creates opportunities for innovative
HR solutions and will reinforce our
leading role in the HR services
industry for years to come.
Local businesses have the
autonomy to respond to changing
market conditions in order to
achieve greater customer
satisfaction and revenue growth.
technological disruption
Technological disruption is threatening to
displace the traditional recruitment and staffing
business model. New delivery platforms and
even non-traditional competitors are quickly
entrenching, and their presence is felt in the
market.
Our Tech & Touch strategy enables us to transform our
business models in order to stay ahead of the
competition. We are making relevant investments in
technology through the Randstad Innovation Fund, and
exciting digital projects are accelerated by our Digital
Factory.
By embracing technology, we are
setting the new industry standard
on service delivery. Technology can
strengthen the human connection
in delivering perfect matches and
this will make us stand out from the
competition.
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operational
risks
current risk-mitigating actions
opportunities
contract liability and delivery
For contract liability, especially in Anglo-Saxon
countries, clients ask us to take a greater share
of the liability for our flexworkers while on their
premises and under their supervision.
Requirements from clients may vary, resulting in
unique contract clauses. Accepting
inappropriately high contractual liability could
result in a client making a claim that would
materially affect the Group’s results.
We encourage the use of standard contracts. Non-standard
contracts are always reviewed by the local legal department,
with guidance provided by the global contract approval policy.
Contract liability is addressed by means of delivery monitoring
carried out by local businesses, while insurance is arranged at
Group level.
We continue to improve the contract delivery process and are
currently introducing a candidate screening and filing blueprint
to strengthen delivery standards. In addition, periodic
compliance reviews are conducted on a regular basis.
Optimizing contract liability
and delivery will improve
our bottom line as well as
our reputation as a trusted
HR partner.
information technology and
cyber security
Technology has permeated all our key
processes, including outsourced ones. IT
security risks, including cyber attacks, are real
and could result in downtime or leaking of
personal data and company-sensitive
information. This poses significant financial and
reputational risks.
With the introduction of the IT General Control Framework, we
are standardizing and strengthening our IT governance.
Related controls have been included in our key control
framework and self-assessment process to ensure their
implementation.
We perform numerous audits to ensure that our key IT
components are properly protected. Future audit plans include
topics such as IT general control, information security, IT
program management, and IT vendor assurance. In order to
respond quickly to IT-related crises we have upgraded our
crisis communications plan.
Enhanced system security
capability protects our
information assets,
including candidate data,
and ensures undisrupted
service delivery to our
clients. Consequently, this
increases customers' trust
and confidence in us.
talent attraction and retention
People are our most important asset, and talent
is hard to come by in a competitive market. If we
cannot attract, develop, and retain the right
people, we could fail in realizing our objectives.
In addition to the annual Great People Survey, we have
introduced Great Conversations. In these regular meetings with
their manager, our employees discuss their ambitions as well
as how they can best contribute to making Randstad an
employer of choice. Talent mobility is evident between Group
departments, as well as between countries. In addition, the
ongoing employee share purchase plans help alignment of
interests with the organization’s long-term growth.
Talent management is a critical topic and is reviewed as part
of the audit plan for the Group Business Risk & Audit
department.
Successful talent
management improves
employees’ quality and
increases employees’
loyalty. This will ensure an
adequate pipeline of talent,
with the aim of delivering
results to our clients,
candidates and
shareholders.
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finance & reporting
risks
current risk-mitigating actions
opportunities
credit risk
Delay in client payments or insolvency of major
clients will lead to greater usage of operating
working capital and increased interest costs.
We have blueprints to promote best practices with regard to
invoicing and credit control. On a regular basis, the collection
status is monitored and reported, with full provision made for
receivables older than 182 days.
Further details on credit risk are provided in note 3 to the
financial statements: 'capital and financial risk management'.
With tighter credit and
collection practices being
rolled out globally, lower
operating working capital is
needed and, as a result, free
cash flow will improve.
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compliance
risks
current risk-mitigating actions
opportunities
data protection laws and
regulations
The General Data Protection Regulations of EU
will come into effect in May 2018. At the same
time, legislative changes that aim to align
salaries between contracting and permanent
roles are evident throughout the world (e.g.,
Japan). New and complicated laws expose us to
higher risk of non-compliance, resulting in
possible claims, fines, business suspension and
reputational damage.
In 2017, our Group Data Protection Policy has been localized for
all operating companies, and supporting tooling for drawing up
a Data Protection Inventory and carrying out privacy and
supplier risk assessments is currently being rolled out. In 2018,
ongoing quarterly local data protection self assessments and
future audits will help our local businesses further prepare for
the imminent EU data protection regulations.
Improved data protection
compliance capability
strengthens the confidence
of our candidates and
clients with regard to our
service industry.
tax and labor law compliance
Complex and changing tax (a.o. CIT and wage
tax), labor and social security regulations could
lead to a lack of clarity and errors in wage, social
security and payroll tax compliance, leading to
possible disputes, claims and fines.
GBRA performs an annual review of the payroll processes
(including related policies and procedures) of selected
countries and involves subject matter specialists as needed.
In our payroll audit, we also
focus on identifying best
practices to be shared
among countries, thereby
enhancing the overall
robustness of the payroll
process.
workplace health and safety
compliance
We have employees working at clients’ premises,
where safety conditions may vary. As we do not
have control over these working conditions, our
flexworkers may be exposed to a hazardous work
environment. This may result in increased
medical claims, absenteeism and worker strikes.
Randstad launched its Global Health & Safety Policy in 2016.
This policy sets out the Group’s goal to promote health and
safety, aiming for a continuous decline in harm through a risk-
based and structured H&S approach. In adopting this policy,
operating companies need to assess their local environment.
For operating companies that supply to heavy industries,
dedicated specialists look after the health and safety aspects
relating to these workers.
Heightened awareness and
sharing of good practices
among operating
companies help to boost
workplace satisfaction and
our reputation as a trusted
HR partner.
competition law compliance
Competition authrorities are increasingly active
in the enforcement of competition (anti trust)
law. Infringements of such laws can occur by, for
example, intentionally or accidentally sharing
information with competitors. These could result
in material fines or penalties or litigation with
clients, each of which could harm our brand.
We provide training with regard to competition law compliance,
our core values and our business principles forms an integral
part of our onboarding program, and management needs to
ensure that written acknowledgement is obtained that such
training has been understood and compliance is observed. We
encourage our employees to report any breaches they find
through the misconduct reporting procedure. When
developing new business models or concepts, our Legal
department (and if necessary competition law experts) is
consulted to ensure legal compliance. Consistent with
Randstad's core values and business principles, we seek to
conduct our business in accordance with all applicable laws,
and have invested considerable time and resources in
improving competition controls and awareness in our
operations.
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emerging risks
While we focus on managing existing key risks, we are
also keenly aware of imminent emerging risks (and
opportunities) that can significantly impact us. For
example, emerging technological developments pose
risks we have incorporated in our Tech & Touch strategy.
In addition, heightened political uncertainty could
impact our fiscal and monetary policies, which we need
to anticipate. Our local-for-local approach allows for
timely adoption of new business models if necessary.
Finally, large-scale involuntary migration could increase
the pool of available talent, but also necessitates more
stringent candidate screening. We need to show
resilience to this risk by improving our internal
processes.
conclusions
The Executive Board is responsible for Randstad’s Risk
& Control framework and for reviewing its effectiveness.
The framework, as described earlier, is designed to
manage the key risks that may prevent us from achieving
our business objectives. However, the framework
cannot provide full assurance that all control gaps,
material misstatements, cases of fraud, or violations of
laws and regulations will be prevented.
In 2017, the Executive Board reviewed and analyzed the
Strategic, Operational, Financial & Reporting, and
Compliance risks to which the Group was exposed, and
it regularly reviewed the design and operational
effectiveness of Randstad's Risk & Control framework.
The outcome of these reviews was shared with the Audit
Committee and the Supervisory Board, and was
discussed with our external auditor.
The Risk & Control framework should ensure consistent
and reliable financial reporting, both internally and
externally. Operating companies develop annual
business plans and budgets, which are subject to
amendment and approval by the Executive Board.
Subsequently, the actual performance of the operating
companies is measured against these business plans
and budgets, and the results are discussed in regular
review meetings between the operating company's
management and the responsible Executive Board
member.
In accordance with the Dutch Corporate Governance
Code, we have assessed the design and operational
effectiveness of our Risk & Control framework. Based on
the activities performed during 2017, and in accordance
with provision 1.4.3, the Executive Board considers that:
• this report provides sufficient insights into any failings
in the effectiveness of the internal risk management
and control systems;
• the aforementioned systems provide reasonable
assurance that the financial reporting does not contain
any material inaccuracies;
• based on the current state of affairs, it is justified that
the financial reporting is prepared on a going concern
basis; and
• the report states those material risks and uncertainties
that are relevant to the expectation of the company’s
continuity for the period of twelve months after the
preparation of this report.
In accordance with the Dutch Financial Supervision Act,
section 5.25c, the Executive Board declares that, to the
best of its knowledge:
• the financial statements for 2017 provide, in
accordance with IFRS as endorsed by the EU, a true and
fair view of the consolidated assets, liabilities and
financial position as at December 31, 2017, and of the
2017 consolidated income statement of Randstad
Holding nv;
• the annual report provides a true and fair view of the
situation as at December 31, 2017, and the state of
affairs during the financial year 2017, together with a
description of the principal risks faced by the Group.
Diemen, the Netherlands, February 12, 2018
The Executive Board,
Jacques van den Broek
Linda Galipeau
Robert Jan van de Kraats
Chris Heutink
François Béharel
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98 executive board
100 supervisory board
102 report of the supervisory board
111 remuneration report
117 corporate governance
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executive board.
jacques van den broek (1960, dutch)
CEO and Chair of the Executive Board
• Joined Randstad in 1988
• Appointed to the Executive Board in 2004
• Appointed as CEO and Chair of the Executive Board in 2014
• Current term of appointment 2014 - 2018
background
After graduating in law, Jacques van den Broek held a management position with an
international trading company until he joined Randstad as a branch manager.
Appointments followed as Regional Director in the Netherlands and, subsequently, as
Marketing Director Randstad Europe. In 2002, he moved to Capac Inhouse Services as
Managing Director, also taking on responsibility for Randstad in Denmark and Switzerland.
responsibilities
Jacques van den Broek is responsible for Germany, Australia, New Zealand, China, Hong
Kong, Singapore & Malaysia. In addition, he is responsible for Group IT, Business Concept
Development, HR, Marketing & Communications, and Public Affairs.
robert jan van de kraats (1960, dutch)
CFO and Vice-Chair of the Executive Board
• Joined Randstad in 2001
• Appointed to the Executive Board in 2001
• Appointed as Vice-Chair of the Executive Board in 2006
• Will step down as member of the Executive Board on 27 March 2018
background
A certified auditor, Robert Jan van de Kraats began his career with one of the big four
accountancy firms. In 1989, he joined an international technology group as Finance and
IT Director for the Netherlands. He held various senior positions with an international credit
insurance group from 1994, and in 1999 he was appointed CFO and member of its
managing board. He joined Randstad in 2001 as CFO. He is also a member of the Board
of Directors of OCI NV and a member of the Supervisory Board of Schiphol Group. Until
December 2016, he was a member of the Monitoring Committee Corporate Governance
Code.
responsibilities
Robert Jan van de Kraats is responsible for Japan, India, Denmark, Sweden, and Norway
and also for Group Finance & Accounting, Business Control, M&A, Tax, Treasury, Business
Risk & Audit, Legal, and Investor Relations.
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linda galipeau (1963, canadian)
• Joined Randstad in 1995
• Appointed to the Executive Board in 2012
• Current term of appointment 2016 - 2020
background
Linda Galipeau received an MBA degree in marketing and managerial economics. After
several years in the staffing industry, she joined Randstad in 1995 as district manager in
the US. In 1997, she started the Canadian operations, and in 2008 she was appointed
President of Randstad Staffing in the US.
responsibilities
Linda Galipeau is responsible for the US, Canada, the UK, Ireland, Monster Worldwide,
RiseSmart, and Randstad Sourceright.
françois béharel (1970, french)
• Joined Randstad in 2008
• Appointed to the Executive Board in 2013
• Current term of appointment 2016 - 2020
background
With a Bachelor's degree in distribution management and commercialization techniques,
François Béharel joined Vedior in 1999 as a Regional Manager. Following various
promotions, he became CEO of Vedior France in May 2007. Following the acquisition by
Randstad, he was appointed President and CEO of the newly combined Randstad Groupe
France, and played a key role in the integration of its businesses.
responsibilities
François Béharel is responsible for France, Spain, Portugal, Belgium & Luxembourg, Brazil,
Argentina, Mexico, Chile, and Uruguay.
chris heutink (1962, dutch)
• Joined Randstad in 1991
• Appointed to the Executive Board in 2014
• Current term of appointment 2014 - 2018
background
Chris Heutink obtained a Master's degree in history. He started his career at Randstad as
a consultant in the Netherlands. Various management positions followed until 2004, when
he was promoted to become Managing Director of Randstad Poland. After moving back
to the Netherlands in 2007, he became Director of Operations. In 2009, he was appointed
Managing Director of Randstad Netherlands.
responsibilities
Chris Heutink is responsible for the Netherlands, Austria, Italy, Switzerland, Poland,
Turkey, Greece, Czech Republic, Hungary and Romania, as well as for Global Client
Solutions.
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supervisory board.
wout dekker (1956, dutch)
Chair of the Supervisory Board
• Member of the Supervisory Board since 2012
• Current term of office 2016−2020
background
Wout Dekker is the former Chairman of the Executive Board and CEO of Nutreco N.V. and
the former Chairman of the Supervisory Board of Rabobank. He is Chairman of the
Supervisory Board of the Princess Maxima Centre for Child Oncology and member of the
Supervisory Board of SHV Holdings NV and Royal FrieslandCampina N.V.
responsibilities
Wout Dekker is Co-Chair of the Remuneration and Nomination Committee (Nomination)
and a member of the Audit Committee.
jaap winter (1963, dutch)
Vice-Chair of the Supervisory Board
• Member of the Supervisory Board since 2011
• Current term of office 2015−2019
background
Until December 2017, Jaap Winter was President of the Executive Board of Vrije Universiteit
Amsterdam. Until December 2013, he was partner at law firm De Brauw Blackstone
Westbroek. He is Professor of International Company Law at the University of Amsterdam
and Distinguished Visiting Professor of Corporate Governance at INSEAD. He was a
member of the Dutch Corporate Governance Committee (2003) and the European
Corporate Governance Forum. He is Chairman of the Supervisory Board of Stichting Het
Van Gogh Museum.
responsibilities
Jaap Winter is Chair of the Strategy Committee and a member of the Audit Committee.
giovanna kampouri monnas (1955, greek)
• Member of the Supervisory Board since 2006
• Current and final term of office 2014−2018
background
Giovanna Kampouri Monnas is the former President of the international division and
member of the Executive Committee of Joh. A. Benckiser GmbH. She is a Non-Executive
Director of Puig S.L, Aptar Group Inc, Fondation Air France and Imerys SA. She is President
of the Estia Agios Nikolaos Foundation in Germany and Greece.
responsibilities
Giovanna Kampouri Monnas is Co-Chair of the Remuneration and Nomination Committee
(Remuneration) and a member of the Strategy Committee.
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henri giscard d’estaing (1956, french)
• Member of the Supervisory Board since 2008
• Current term of office 2016−2020
background
Henri Giscard d’Estaing has been Chairman of the Board and CEO of Club Méditerranée
SA since December 2002. Before joining Club Méditerranée in 1997, he held various
management positions at Groupe Danone and Cofremca. He was formerly a member of
the Supervisory Board of Vedior N.V. He is currently also a member of the Board of
Directors of Groupe Casino Guichard-Perrachon SA and a global partner of the Fosun
Group.
responsibilities
Henri Giscard d’Estaing is a member of the Strategy Committee.
frank dorjee (1960, dutch)
• Member of the Supervisory Board since 2014
• Current term of office 2014−2018
background
Frank Dorjee was Chief Strategic Officer and member of the Board of Directors of Prysmian
Spa from March 2011 until January 2014. Until its takeover by Prysmian Spa, he was CEO
and Chairman of the Executive Board of Draka Holding NV from 2010 to 2011 and its CFO
from 2004 until 2009. He is a member of the Supervisory Board of Koole BV, FRV BV and
Beacon Rail Lux Holdings S.A.R.L. and a member of the Board of Directors of YOFC.
responsibilities
Frank Dorjee is Chair of the Audit Committee.
barbara borra (1960, italian)
• Member of the Supervisory Board since 2015
• Current term of office 2015−2019
background
Barbara Borra is CEO for EMEA of Fontana Group. Before joining Fontana, she was with
Whirlpool for 10 years, serving in different senior management positions and more
recently as Vice-President of its Chinese operations. Before joining Whirlpool, she held a
number of international roles in various countries at Rhodia, GE and Lev-O-Cal Company.
She is a member of the Board of Directors of Brembo.
responsibilities
Barbara Borra is a member of the Remuneration and Nomination Committee.
rudy provoost (1959, belgian)
• Member of the Supervisory Board since 2015
• Current term of office 2015−2019
background
Rudy Provoost is the former CEO and Chairman of the Board of Directors of the Rexel
Group. Before joining the Rexel Group in 2011, he was a member of the Management Board
of Royal Philips and successively CEO of Philips Lighting and CEO of Philips Consumer
Electronics. He also held various senior leadership and executive management positions
at Whirlpool, Canon and Procter & Gamble. He is currently a member of the Board of
Directors of Elia as well as the Vlerick Business School.
responsibilities
Rudy Provoost is a member of the Strategy Committee.
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report of the supervisory board.
introduction
2017 was another solid year for Randstad, during which
a number of key decisions were taken that will be crucial
in the company's ongoing drive to transform itself. New
steps were taken to further roll out the digital strategy.
With regard to Group strategy and development,
alignment between the Boards is strong. The intended
reappointments of Jacques van den Broek and Chris
Heutink within the Executive Board and the succession
of Robert Jan van de Kraats by Henry Schirmer as
member of the Executive Board & CFO are part of
leadership planning, necessary for a company going
through a transformation. The Supervisory Board is
excited about Randstad becoming the trusted human
partner in the technology-driven world of talent, the new
Human Forward brand promise, and the ultimate goal
that underpins the company's commitment to
maximizing future employment and contribute to
economic growth for society.
In this report, the Supervisory Board explains how it
fulfilled its duties and responsibilities in 2017.
composition, diversity and
independence
The Supervisory Board currently comprises seven
members: Wout Dekker (Chair), Jaap Winter (Vice-
Chair), Barbara Borra, Frank Dorjee, Henri Giscard
d'Estaing, Giovanna Kampouri Monnas, and Rudy
Provoost (see the section supervisory board for
biographies). The members have a diverse mix of
knowledge, skills, and expertise, in line with the required
profile as included in Annex 2 of the Supervisory Board's
by-laws. The Supervisory Board aims to ensure that its
members represent a good balance in terms of diversity,
which includes diversity of background, skills, working
experience, age, nationality and gender, among other
criteria. The Supervisory Board aims for at least one-
third of its membership to be female, a criterion that is
taken into consideration for each vacancy.
At the next Annual General Meeting of Shareholders, to
be held on March 27, 2018, the third and final term of
Giovanna Kampouri Monnas will expire. The Supervisory
Board is extremely grateful to Giovanna Kampouri
Monnas for her excellent contribution to Randstad
during the twelve years she has served the company in
various roles, notably as member of the Strategy
Committee and member of the Remuneration and
diversity profile of the supervisory board
name
year of birth
nationality
international
experience
financial
expertise
specific
experience
gender
Wout Dekker
1956
Dutch
yes
(CEO)
Nutrition
male
Barbara Borra
1960
Italian
yes
Home appliances
female
Frank Dorjee
1960
Dutch
yes
CFO
Cables
male
Henri Giscard d'Estaing
1956
French
yes
(CEO)
Tourism
male
Giovanna Kampouri Monnas
1955
Greek
yes
Consumer goods
female
Rudy Provoost
1959
Belgian
yes
(CEO)
Distribution
male
Jaap Winter
1963
Dutch
yes
(CEO)
Legal/Governance male
retirement and reappointment schedule
name
year appointed
year of possible
reappointment
final term
expires
current number of SB positions
including Randstad
Wout Dekker
2012
2020
2024
4 (2 Chair)
Barbara Borra
2015
2019
2027
2
Frank Dorjee
2014
2018
2026
5
Henri Giscard d'Estaing
2008
-
2020
2
Giovanna Kampouri Monnas
2006
-
2018
4
Rudy Provoost
2015
2019
2027
1
Jaap Winter
2011
2019
2023
2 (1 Chair)
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Nomination Committee. As Chair of the latter
Committee, she has been responsible for remuneration
affairs since 2015. She has played a key role in assessing
and updating the remuneration policy for the Executive
Board, which was widely approved by shareholders at
the Annual General Meeting in 2017. The Supervisory
Board proposes that she be succeeded by Annet Aris.
Her nomination has been carefully decided based on the
Supervisory Board's profile and mix of experience, while
also taking the Supervisory Board's diversity profile and
Randstad's diversity policy into critical consideration.
The Supervisory Board is of the opinion that Annet Aris's
profile is complementary to its composition. In
particular, her knowledge of the digital world can be of
great and added value to Randstad as digital
transformation is a very important pillar of the
company's overall strategy going forward. The first term
of Frank Dorjee will also expire. Frank Dorjee has played
an excellent role during his first term, specifically as
Chair of the Audit Committee, in which role he brings
solid overview, open discussion, and fine analysis,
benefiting from his general and financial executive
background. In 2017, he was closely involved in the CFO
succession. The Supervisory Board proposes that he be
reappointed for a second term of four years.
The Supervisory Board attaches great importance to the
independence of its members. As a rule, all members,
with the exception of no more than one, should be
independent in the sense of Article 1.5 of the
Supervisory Board's by-laws. With the exception of Jaap
Winter, who was appointed upon nomination by
Randstad Beheer (the private shareholding company of
Frits Goldschmeding, Randstad's founder and leading
shareholder), all members are independent. They were
not granted, nor do they possess, any Randstad shares,
with the exception of Henri Giscard d'Estaing, who
personally holds 450 shares in the company. In 2017,
there was no actual or potential conflict of interest
between Randstad and any Board member. In line with
legislation and as part of the key control framework of
the company, members of the Supervisory Board (as
well as the Executive Board) are required to annually
state their related parties and transactions, if any,
between these related parties and the company. It was
confirmed that no related-party transactions occurred
in 2017, except for those cases in which members of the
Supervisory Board use a management company to
invoice their related directors' fees to Randstad.
induction, training and
performance assessment
Ongoing education is an important part of good
governance. New members of the Supervisory Board
attend induction sessions at which they are informed on
the financial, reporting, risk & audit, HR, marketing &
communications, legal, and governance-related affairs
of the company. Members of the Supervisory Board
regularly visit Randstad's operations to gain familiarity
with senior operational and functional management,
and to develop deeper knowledge of operations,
opportunities, and challenges.
At a separate meeting held in December 2017, the
Supervisory Board discussed at length its composition,
its own performance, and that of its committees. This
self-assessment was facilitated by an external advisor,
Linda Hovius. In preparation, she interviewed each
member of the Supervisory Board and the Executive
Board, as well as the Company Secretary. In the self-
assessment report, she included (anonymously) the
various individual observations with regard to the
functioning of the Supervisory Board and its relationship
with the Executive Board. Items assessed and
subsequently discussed by the Supervisory Board
included (1) team effectiveness, (2) interaction and
dialogue, (3) competencies, succession and
onboarding, (4) effectiveness and relevance of the
Committees, (5) agenda setting, (6) its relationship with
the Executive Board, and (7) governance, top structure
and organization model.
In its self-assessment, the Supervisory Board concluded
that the large majority of these items were assessed
positively. Team spirit is considered strong,
encouraging mutual trust, open discussion, and clear
understanding of each Board member's role. Expertise
within the Supervisory Board is diverse and
complementary. Dialogue with the Executive Board on
strategy has greatly improved, especially during the
annual joint strategic offsite session. The Supervisory
Board was particularly pleased to see the successful
definition and implementation of Randstad's digital
strategy; the succession planning of the CFO was well
managed; and the new remuneration policy for the
Executive Board was well prepared and is now more
focused on team work and joint responsibility. Some of
the additional key findings and points for follow-up are:
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• The Supervisory Board is growing in its supervisory and
advisory roles, but further improvement could be
realized through in-depth discussion and exchange of
ideas about specific topics, strategic subjects, and
dilemmas faced by the Executive Board and where the
Supervisory Board could add value. In order to
optimize preparation and subsequent reflection, the
Supervisory Board will have short private meetings
before and after each joint meeting with the Executive
Board.
• The dynamics within the Supervisory Board are good:
everyone brings in their expertise, and openly
contributes to the dialogue. Nevertheless, the decision
making process could be further optimized by
expressing individual points of view more explicitly to
clarify the level of consensus.
• The Supervisory Board aims to design a more
structured performance evaluation and feedback
process for the individual members of the Executive
Board, paying more attention to leadership
development. The Chair of the Supervisory Board and
the Chair of the Remuneration Committee are taking
the lead in this process and are holding formal
evaluation conversations with each Executive Board
member.
• Given the transformation of the company and general
developments, going forward, the Supervisory Board
will pay more attention to governance, top structure,
the organization model, and succession planning. This
will include the creation of a Governance & Nomination
Committee, which will inevitably result in a split of the
current Remuneration and Nomination Committee.
The Remuneration Committee will continue to take
charge of all affairs relating to the company's
remuneration policy and its execution. The Strategy
Committee will be discontinued, as strategy is
perceived primarily as a joint responsibility. It is
currently well covered throughout the year, most
notably during the joint annual strategic offsite
session.
supervisory and advisory
activities in 2017
meetings of the supervisory board and
attendance
The Supervisory Board met thirteen times during 2017
(2016: nine times). One of these meetings was held by
conference call, and eight were held jointly with the full
Executive Board. The other four meetings were held
without the Executive Board, but some were in part
attended by the CEO. These meetings were held to
discuss Executive Board remuneration, the review of the
remuneration policy and the composition and
assessment of the Supervisory Board (including the
proposed reappointment of Frank Dorjee and the
nomination of Annet Aris). At one of these meetings, the
Executive Board extensively discussed the functioning
of the Executive Board, both as a team and its individual
members. The Supervisory Board carefully considered
the functioning of Jacques van den Broek and Chris
Heutink in light of their proposed reappointment at the
upcoming Annual General Meeting of Shareholders.
A number of meetings were held to update the
Supervisory Board on the succession of the CFO, Robert
Jan van de Kraats. The Chair of the Supervisory Board
and the Chair of the Audit Committee were in the lead
of this process, in close alignment with the CEO and the
current CFO. During the search, specific attention was
given to diversity of background, skills, working
experience, age, nationality and gender, among other
criteria. The Supervisory Board is extremely pleased that
Henry Schirmer, currently Executive Vice President
Finance for Unilever Europe, will succeed Robert Jan van
de Kraats at the next Annual General Meeting of
Shareholders on March 27, 2018. With his financial
expertise and great international track record, Henry
Schirmer will be able to lead Randstad into the next
phase of growth. At the same time, the Supervisory
Board is exceptionally grateful to Robert Jan van de
Kraats for his exemplary commitment and very valuable
dedication to Randstad during the 17 years that he was
member of the Executive Board and CFO. After he steps
down from the Executive Board, Robert Jan van de
Kraats will continue to focus on his operational
responsibilities until the end of 2018. In 2019, the last
year of his assignment, he will act as an advisor to the
Supervisory Board.
Between meetings, the Chair of the Supervisory Board
regularly maintained contact with the CEO and CFO. He
also frequently met with Randstad's leading shareholder
and his representative director. Individual Supervisory
Board members set up meetings related to their
membership of specific Committees or specific
mandates.
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In 2017, Rudy Provoost, Henri Giscard d'Estaing, and
Giovanna Kampouri Monnas were absent at two of the
thirteen meetings. Their attendance rate was therefore
85%.The attendance rate of the other members of the
Supervisory Board was 100%.
topics discussed and agreed with the
supervisory board
The Supervisory Board meets in any case each quarter
one day before the publication of the quarterly results,
when it discusses these results with the Executive Board,
as well as related documents, such as the draft press
release and the auditor's quarterly report on procedures
performed. These results and related documents are
first discussed by the Audit Committee prior to the
Supervisory Board meeting. The external auditor was
present for the discussion of the 2016 annual report and
accounts.
In addition to the standard agenda items for meetings,
such as the development of the financials and the
business performance throughout the year, the
Supervisory Board discussed the following topics with
the Executive Board in 2017:
• organizational changes and senior management
appointments;
• the assessment of strategic, operational, financial, and
compliance risks, including Randstad's approach to
risk and opportunity management, based on the
quarterly report of Group Business Risk & Audit and the
external auditor's quarterly report;
• compliance with relevant rules and legislation;
• the revised Dutch corporate governance code and the
update of the by-laws of the Executive Board and
Supervisory Board, as well as the terms of reference of
the Committees, in order to bring these in line with the
revised code;
• the preparation, evaluation, and follow-up of the
Annual General Meeting of Shareholders;
• topics related to sustainability relevant to Randstad,
including the reporting framework and related key
drivers and key performance indicators;
• the views of analysts and investors, as well as changes
in the shareholder structure and base;
• the structure and strategic priorities of the global HR
function;
• the new strategy for Global Client Solutions;
• the company's value creation, capital allocation and
dividend policy; and
• the budget for 2018.
In 2017, the Supervisory Board closely monitored the
integration and performance of a relatively large
number of acquisitions made in 2016 and at the start of
2017: Proffice, Obiettivo Lavoro, Careo, twago, BMC,
and particularly Monster Worldwide and Ausy. The
Supervisory Board paid attention to a number of key
items, such as financial performance, changes to top
structure, (re)organizations, commercial strategy,
technology development, and value creation.
During the year, the Supervisory Board was regularly
updated about Randstad's global identity, new brand
positioning (Human Forward) and ultimate goal. The
Supervisory Board strongly supports these, as they are
fully in line with Randstad's purpose, foundation, and
core values. Although it is sometimes difficult for
members of the Supervisory Board, in their role as non-
executives, to get a good sense of the culture within
Randstad, they do challenge the Executive Board on
related topics. Purpose, mission, and core values are
considered to be strong within Randstad. The culture
within the company is important to attract and retain top
talent. The tone at the top is derived from the core values
and embedded within the leadership style. The related
behavior-focused management approach implies
setting the example, being transparent, communicating
openly and clearly, and focusing on integrity and good
governance. Employee engagement and cultural fit are
measured as part of the annual Great People Survey,
whose results are shared with the Supervisory Board.
To underline the importance of Randstad's business
principles and the procedure for reporting misconduct,
the Supervisory Board shares responsibility for these
matters with the Executive Board. An assessment of the
complaints reported under the misconduct reporting
procedure is shared with the Audit Committee annually.
The Supervisory Board is frequently updated on
developments in operating companies and markets. In
2017, senior management of the operations in the
Netherlands (Randstad & Tempo-Team) and Canada
joined a Supervisory Board meeting and gave an update
on their markets. Every year, the Supervisory Board,
jointly with the Executive Board, pays a two-day visit to
the operations in a different country. Their joint visit to
clients, branches, and Randstad's head office in Italy in
June 2017 provided additional insight into the quality of
local operations and management. Particular attention
was paid to the successful integration of Obiettivo
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Lavoro, which was acquired in 2016. Individual members
of the Supervisory Board also paid visits to various
businesses within Randstad on an ad-hoc basis.
strategy discussion and strategic offsite
meeting
One of the Supervisory Board's main priorities is
strategy. Accordingly, time was spent on in-depth
discussions with the Executive Board about the overall
strategy and the realization of the strategic targets. The
Strategy Committee prepared and set the framework for
these discussions.
At several meetings in 2017, extensive discussions were
held on the digital strategy, the development of related
digital concepts and workstreams, the cross-functional
and cross-country setup, as well as the synergies of the
Monster Worldwide acquisition for Randstad's digital
strategy.
At the annual strategic two-day offsite meeting in
October 2017, the Supervisory Board and the Executive
Board also discussed the above topics relating to the
digital strategy, as well as a significant number of other
relevant strategic topics, including:
• the governance and leadership structure, including
the allocation of global responsibilities among the
members of the Executive Board;
• the role of Group-wide functions, some of which are
organized more globally than centrally, using strong
local leadership;
• the outcome of the 2-year growth plan, which is based
on the input from the operating companies;
• the strategy for the Professionals segment, which
requires more focus on talent engagement and
organizational alignment, and will accelerate in Europe
through the setup of Continental European
Professionals and the acquisition of Ausy;
• the strategy and performance of Monster, as clarified
by its CEO; and
• a review of global strategic initiatives, such as those
relating to field and headcount steering, central
sourcing, the reallocation of marketing spend, the
implementation of a shared service center for global IT
infrastructure, and cross-country procurement.
supervisory board
committee activities in
2017
The Supervisory Board has three Committees: the Audit
Committee, the Remuneration and Nomination
Committee, and the Strategy Committee. Their roles are
described in more detail in the section corporate
governance. They generate detailed information and
prepare recommendations relating to their specific
areas, while the full Supervisory Board retains overall
responsibility. In each case, the Committee Chair
reports the Committee's main considerations and
findings to the full Supervisory Board, usually
immediately after the relevant Committee meeting.
The composition of these Committees was as follows:
audit committee
Frank Dorjee (Chair), Wout Dekker, and Jaap Winter. The
first two members in particular have relevant expertise
in the field of financial management.
remuneration and nomination committee
Giovanna Kampouri Monnas (Chair for Remuneration),
Wout Dekker (Chair for Nomination), and Barbara Borra.
strategy committee
Jaap Winter (Chair), Henri Giscard d'Estaing, Giovanna
Kampouri Monnas, and Rudy Provoost.
All Supervisory Board members have a standing
invitation to attend meetings of Committees of which
they are not a member, which they do attend on an ad-
hoc basis.
report of the audit committee
The Audit Committee assists the Supervisory Board in its
responsibility to oversee Randstad's financing, financial
statements, financial reporting process, and system of
internal business controls, risk management and audit.
Five meetings were held in 2017 (2016: five). All meetings
were attended by the CEO, the CFO, and the managing
directors for Group Business Control, Group
Accounting, and Group Business Risk & Audit. The
external auditor was also present. At least once a year,
the Audit Committee discusses with the external
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auditor, without management being present, their
assessment of Randstad's performance, as well as the
collaboration with the Executive Board and the finance
departments, including their functioning.
Each quarter, the Chair of the Audit Committee meets
with the CFO and, separately, with the managing
directors of Group Business Control, Group Accounting,
and Group Business Risk & Audit, generally in
preparation of the quarterly Audit Committee meeting.
Also, when considered necessary, the Chair meets with
the external auditor in advance.
At each meeting, the Audit Committee discusses the
financial performance in much detail, as well as related
items, such as the draft press release, the external
auditor's report with quarterly observations, and the
quarterly update from Group Business Risk & Audit,
which contains management self-assessments of risks
and controls, audit results, and progress and outcomes
of fraud investigations.
In addition, the following topics were discussed during
the year:
• an update on Group Treasury (including insurance and
procurement) and Group Tax, mostly provided by the
managing director responsible;
• a report from the managing director Group Legal on
operating companies' compliance with key policies,
with a special focus on data protection and
information/cyber security, as well as compliance and
e-learning tools for employees;
• the annual legal letter, listing material litigation (where
potential liability exceeds € 1 million); any cases with a
liability potentially exceeding € 2.5 million are
promptly reported to the Audit Committee;
• the procedure for reporting misconduct, including the
report of the central integrity officer summarizing the
cases reported under this procedure;
• the updated terms of reference of the Audit
Committee, reflecting changes in line with the updated
Dutch Corporate Governance Code;
• changes of key people in the finance function in
operating companies and at Group level; and
• the annual talent and performance review of the
finance function and its key people, including the
World League Finance Program, whose aim is to
develop the finance function, finance staff, and the
finance organization throughout Randstad.
With regard to the external audit, the Audit Committee
reviewed Deloitte's proposed audit plan relating to the
audit scope (90% of Group revenue), approach, focus
areas, and fees (see note 28 to the financial statements).
BDO presented its audit of the local statutory accounts
of a number of smaller countries not included in the
Group audit scope by Deloitte. No material issues were
noted by BDO.
The risk profile and in-control position of the Group was
discussed multiple times in various ways and at least
quarterly. For example, this was done at the start of the
year, when the Audit Committee approved and updated
Deloitte's audit plan, which is based on Randstad's risk
profile and priorities for 2017. In October, the risk-based
audit plan for 2017 was discussed.
In the second and fourth quarters, the Group's in-control
situation was discussed in more detail, using the results
of the risk assessments, the key control framework, and
the internal audits. This discussion addressed key risks,
taking into account the effectiveness of controls to
mitigate these risks. Priorities for internal audits of local
audit teams are set by the managing director Group
Business Risk & Audit and discussed and agreed with the
Executive Board and the Audit Committee. This semi-
annual in-control evaluation process allows all Group
companies to further develop controls using a maturity
model. Further information can be found in the section
risk & opportunity management.
The Group Business Risk & Audit department is
adequately embedded within the organization by way of
the Global Risk & Audit network, consisting of local
internal auditors at operating company level. In 2017, the
Audit Committee approved the updated Business Risk &
Audit Charter, which confirms that the department's
managing director has direct access to the Chair of the
Audit Committee, as such ensuring objectivity,
authority, and responsibility setting.
The Audit Committee assured itself of the independence
of the external auditor and the non-audit services
provided by the external auditor, in line with the relevant
policy.
The Audit Committee assessed the performance of the
external auditor, based on a satisfaction survey
conducted among all CFOs of the operating companies
and key corporate finance staff. As part of this annual
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evaluation process, the following items were taken into
consideration: (1) the quality of the audit work, (2) the
sufficiency and fulfillment of the audit engagement, (3)
the quality of the auditor's reports, (4) the independence
of the auditors, (5) the expertise and composition of the
audit team, (6) the audit fee, and (7) quality control
within the audit firm.
report of the strategy committee
The Strategy Committee acts as a sparring partner for
the Executive Board and contributes in depth to the
preparation of the semi-annual discussion of Randstad's
strategy with the full Supervisory Board. Each member
has his or her own specific and extensive experience in
strategy development and related processes. All
meetings are attended by the full Executive Board.
In 2017, the Committee met once and fully focused on
the follow-up of the strategic offsite meeting held in
October 2016, and the preparation of the strategic
offsite meeting in October 2017, as elaborated on in
detail above under 'Strategy discussion and strategic
offsite meeting'.
During its annual self-assessment, the Supervisory
Board decided to discontinue the Strategy Committee,
as strategy is perceived as a joint responsibility. Strategy
issues are currently well handled, notably during the
joint strategic offsite meeting.
report of the remuneration and nomination
committee
The Remuneration and Nomination Committee primarily
makes recommendations regarding the remuneration
(and the remuneration policy) of the Executive Board
and the Supervisory Board. It is also tasked with advising
on candidates to fill vacancies in both Boards. Each
Committee member has specific expertise in the area of
remuneration and HR-related issues.
The Committee met three times in the course of 2017
(2016: three). The CEO participated in part of these
meetings. The Committee regularly made use of
external advice, notably from Korn Ferry Hay Group and
Towers Watson.
remuneration-related topics
The Committee discussed the remuneration of the
Executive Board, notably the setting and realization of
the related performance targets. At the start of 2017, the
Committee, led by the Chair, Giovanna Kampouri
Monnas, and assisted by the Company Secretary,
finalized its assessment of the full remuneration policy
of the Executive Board. Korn Ferry Hay Group, an
independent strategic human capital advisory firm, was
commissioned to provide advice. The members of the
Executive Board were requested to give their views on
the current remuneration policy as well as make
suggestions for adjustment. The Annual General
Meeting of Shareholders in March 2017 approved the
proposal of the Supervisory Board to make a relatively
limited number of adjustments to the remuneration
policy for the Executive Board. More information can be
found in the remuneration 2017 section in the
remuneration report.
nomination-related topics
The Committee discussed the annual assessment of the
Executive Board and its individual members, succession
planning, and the annual performance review of the
second-level leadership reporting to the Executive
Board (all of whom are scheduled to meet and present
to the Supervisory Board, if feasible), as well as high
potentials. An extensive update was provided to the
Committee by HR leaders on Randstad's HR strategy in
the context of creating a high performance culture and
the Tech & Touch strategy. The latter requires a new
leadership style for which a transformational leadership
program has been developed which was clarified to the
Committee. It also discussed diversity-related topics.
The Supervisory Board aims to ensure that both its own
composition as well as the composition of the Executive
Board represents a good balance in terms of diversity
(including experience, gender, and nationality). The aim
is that at least one-third of each Board's members meet
the gender criterion, which is currently almost being
met for the Supervisory Board, but not yet for the
Executive Board. Randstad's policy regarding diversity
is described in the gender quality, inclusion and
diversity section of this annual report. A key factor in
diversity is providing equal opportunities for women.
The percentage of women in senior management
positions amounted to 46.9% in 2017 (2016: 45.2%).
Diversity will continue to be an important consideration
for all future nominations to the Boards.
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supervisory board
remuneration
The Annual General Meeting of Shareholders
determines the remuneration of the members of the
Supervisory Board. Their remuneration is a fixed annual
allowance paid in monthly installments. It is not linked
to the financial results of the company. Members of the
Supervisory Board do not receive any performance-
related compensation or shares, and do not accrue any
pension rights with the company.
Members of the Supervisory Board who hold shares in
the company are only allowed to do so as long-term
investments. They adhere to the company's insider
dealing rules. Randstad does not grant loans or
guarantees to Supervisory Board members.
allowances of supervisory board members
in €
2017
2016
Supervisory Board
Chair
110,000
110,000
Vice-Chair
90,000
90,000
Members
75,000
75,000
Audit Committee
Chair
12,000
12,000
Members
8,000
8,000
Remuneration & Nomination Committee
Chair
9,000
9,000
Members
7,000
7,000
Strategy Committee
Chair
8,000
8,000
Members
6,000
6,000
The annual allowances were last determined by the
Annual General Meeting of Shareholders held in 2012,
while the annual Committee fees were last determined
by the Annual General Meeting of Shareholders held in
2011. The annual allowances and Committee fees for the
Chair and members of the Supervisory Board are shown
in the table.
In addition, Supervisory Board members receive a fixed
annual expense allowance of € 2,000 net for members
and € 3,000 net for the Chair. Taking into consideration
their significant effort and travel time, Supervisory Board
members receive an attendance fee of € 1,500 per
meeting when cross-border travel is required in order to
attend a Supervisory Board meeting.
report of the annual general
meeting of shareholders
At the Annual General Meeting of Shareholders, held on
March 30, 2017, the CEO and the CFO gave an account
of the general state of affairs at Randstad and its financial
performance in 2016. The meeting adopted the 2016
financial statements and the dividend proposal. The
members of the Executive Board were granted
discharge of liability for their management, and the
members of the Supervisory Board for their supervision
thereof. The meeting approved the proposal to extend
the Executive Board's authorization to issue ordinary
shares, limited to a maximum of 3% of the ordinary
issued share capital for a period of 18 months, as well as
to repurchase ordinary shares and cancel repurchased
shares, limited to a maximum of 10% of the ordinary
issued share capital for a period of 18 months. As
referred to above, the amendment of the remuneration
policy for the Executive Board was approved. Deloitte
Accountants B.V. in the Netherlands was appointed as
external auditor for the financial year 2018.
Similar to the previous year, the Chair of the Audit
Committee proactively elaborated on the work of the
Audit Committee in 2016, the company's collaboration
with the external auditor, and some specific items that
were relevant in the past year:
• valuation of goodwill, based in part on the annual
goodwill impairment test, which led to an impairment
of € 10 million;
• valuation of the company's position concerning
deferred taxes;
• the accounting of new acquisitions;
• some fraud-related matters, which were immaterial to
Randstad.
The lead partner of Deloitte Accountants was given the
floor to elaborate on the audit procedure and the
auditor's opinion with regard to 2016. He specifically
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focused on (1) materiality, (2) scope, (3) internal audit,
control and IT systems, (4) key audit matters in the
financial statements, and (5) the review of the
management report.
financial statements for
2017
The financial statements for 2017 have been audited and
provided with an unqualified opinion by Deloitte
Accountants B.V. (see the auditor's report) and were
extensively discussed with the auditors by the Audit
Committee in the presence of the CEO and the CFO in
February 2018. The full Supervisory Board then
discussed them with the full Executive Board in the
presence of the auditors. The Supervisory Board is of the
opinion that the financial statements 2017 meet all
requirements for correctness and transparency. During
the year, the Audit Committee extensively discussed the
Risk & Control framework that supports this. As such, the
Supervisory Board recommends that the Annual
General Meeting of Shareholders, to be held on March
27, 2018, adopt the financial statements and the
appropriation of net income proposed by the Executive
Board.
The Supervisory Board supports the proposed
adjustment of Randstad's capital allocation strategy and
endorses the Executive Board's proposal to the Annual
General Meeting of Shareholders to pay a regular cash
dividend per ordinary share of € 2.07 for 2017 (€ 1.89 for
2016), a special dividend of € 0.69 per ordinary share,
and a cash dividend on preference shares B and C of
€ 12.6 million (€ 12.6 million for 2016).
The Supervisory Board requests that the Annual General
Meeting of Shareholders grants discharge to the
members of the Executive Board for their management
and to the members of the Supervisory Board for their
supervision in 2017.
The Supervisory Board would like to thank all Randstad
employees, under the strong leadership of the Executive
Board, for their contribution and continuing dedication
in 2017.
Diemen, the Netherlands, February 12, 2018
The Supervisory Board,
Wout Dekker, Chair
Jaap Winter, Vice-Chair
Barbara Borra
Frank Dorjee
Henri Giscard d'Estaing
Giovanna Kampouri Monnas
Rudy Provoost
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The Remuneration and Nomination Committee of the
Supervisory Board is responsible for assessing and
preparing the remuneration policy of the Executive
Board. The Supervisory Board decides on its proposals
and, in the event of material policy changes, submits
these proposals to the Annual General Meeting of
Shareholders for adoption.
remuneration policy
The last update of the remuneration policy was adopted
by the Annual General Meeting of Shareholders held on
March 30, 2017. The key reasons for updating the
remuneration policy were:
• to align with the strategic direction for the
transformation of Randstad;
• to strengthen the focus on long-term sustainable value
creation;
• to stay focused on the values and societal aspirations
of Randstad; and
• to reward the Executive Board as a team rather than as
individual members.
The main objectives of the remuneration policy are:
• to attract and retain qualified senior executives of the
highest caliber, who have an international mindset and
the background required for the successful leadership
and effective management of a large global company;
• to balance short-term operational performance with
the long-term objectives of the company and value
creation for its stakeholders; and
• to align total compensation with the remuneration
structure for senior management.
Remuneration levels are determined on the basis of a
number of clear and transparent criteria. They are
benchmarked against an international labor market peer
group regarding base salary levels, and against an
international performance peer group to establish
relative performance:
• The international labor market peer group represents
the market in which Randstad competes for senior
management talent and is used to benchmark base
salary levels. It is composed of international staffing
and business services companies, reflecting
Randstad's size, profile and international scope. As of
2017, the peer group was extended from 13 to 24
companies, in line with good market practice. These
are Accor, Adecco, Atos, Bureau Veritas, Capgemini,
Capita, CGI, Compass Group, G4S, Equifax, Hays,
Hilton Worldwide, Intertek Group, Manpower Group,
Michael Page International, Kelly Services, Rentokil
Initial, Recruit Holdings, Robert Half, Securtas, Sodexo
Group, Thomas Cook, TUI, and Tyco International.
• The international performance peer group is used as a
benchmark to establish relative performance in terms
of Total Shareholder Return (TSR) for the payout of the
long-term incentive plan. It reflects the market in which
the company competes for shareholder preference.
For the performance share plans until 2016, this group
is composed solely of staffing companies: Adecco,
Hays, Groupe Synergie, Kelly Services, Manpower
Group, Michael Page International, Trueblue Inc,
Robert Half International, TrueBlue, and USG People.
Following its acquisition by Recruit Holdings, USG
People was replaced by Recruit Holdings as of 2016. As
of 2017, the group was extended to 19 companies,
deleting 2 peers that operate primarily locally
(Synergie and TrueBlue), while adding cyclical and
asset-light business services companies (Capita,
Compass Group, G4S, ISS, Office Depot, On
Assigment, Rexel, Securitas, Sodexo, Staples, and WW
Grainger). As Staples delisted in 2017, it will be
replaced by FedEx as of 2018.
• As an additional sanity check, total compensation
levels are benchmarked annually against a peer group
of companies listed on the AEX index (consisting of
large companies listed on Euronext Amsterdam),
excluding Royal Dutch Shell, Unilever, ArcelorMittal,
Vopak, Galapagos, and the financial services
companies.
executive board
remuneration 2017
The remuneration of the Executive Board consists of
three components:
1. short-term compensation, consisting of a base salary
and an annual cash bonus opportunity;
2. long-term compensation, consisting of performance
shares; and
3. pension and other benefits.
The variable portion of the total remuneration package
is performance-related. It consists of short- and long-
term components. For on-target performance, more
than 60% of the total compensation of a member of the
remuneration report.
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Executive Board is performance-related. The
Supervisory Board, on the recommendation of its
Remuneration and Nomination Committee, sets the
targets prior to each performance period. Performance
targets and conditions are derived from Randstad's
strategy, annual budget plan, and market analysis. An
overview of the 2017 and comparable 2016
remuneration amounts is included in note 24 to the
financial statements.
short-term compensation
base salary
The update of the remuneration policy in 2017 did not
result in a change of base salary levels. In alignment with
Randstad's size and profile, compared to the other
companies included in the international labor market
peer group, base salaries of the Executive Board
members are set at between the median and 75%
percentile level.
In line with the company's remuneration policy and
confirmed by benchmarking carried out by Korn Ferry
Hay Group, it was decided to increase the base salaries
of the Executive Board members by 2.0% as of January
1, 2017, except for the CEO, whose salary was not
increased but kept at the level agreed upon when he was
appointed as CEO. The general pay differentials within
the company, and specifically within senior
management, were taken into account when taking this
decision.
annual cash bonus opportunity
The update of the remuneration policy in 2017 kept the
bonus opportunity unchanged. The total annual cash
bonus opportunity amounts to 70% of base salary for on-
target performance, and the maximum bonus level is
100% of base salary. If performance is below a
predefined minimum level, no bonus will be paid out. In
calculating the bonus, a sliding scale between the
minimum level and the maximum level is used. As of
2017, the entire annual cash bonus has been based on
the joint performance of the Executive Board to
strengthen teamwork and focus on overall company
goals. The previous 15% bonus opportunity based on
individual targets and the 10% discretionary bonus have
been discontinued.
The largest part of the achievable annual bonus (75%)
continued to be related to a certain number of financial
targets. In contrast to previous practice, however, the
choice and weight of these targets now depend on the
specific business objectives of each year, with the
Supervisory Board selecting the appropriate annual
targets from an agreed menu of financial targets. In
addition to the targets used until 2017 (revenue, gross
profit, EBITA, EPS, net debt, leverage ratio, and debtor
days), relative revenue performance versus the market
and incremental conversion or recovery ratios are also
taken into account. These two new measures are key to
enabling the company to focus on growing profitably
within the market.
For 2017, the financial targets and their relative
weighting have been set as follows:
• revenue, with market share validation: the bonus
opportunity ranges from 15% of base salary for
minimum performance to 25% for on-target
performance and 35% for maximum performance;
• EBITA margin: the bonus opportunity ranges from 10%
of base salary for minimum performance to 15% for on-
target performance and 25% for maximum
performance;
• debtor days: the bonus opportunity ranges from 5% of
base salary for minimum performance to 10% for on-
target performance and 15% for maximum
performance.
Detailed numerical targets cannot be disclosed, as these
are share price and competition sensitive.
To further underline joint responsibility, at the start of
each financial year, following a presentation by the
Executive Board, the Supervisory Board sets annual
strategic and operational objectives. This bonus
opportunity will be a maximum 25% of base salary. These
targets will only be disclosed if these are not share price
or competition sensitive. For this reason, these targets
cannot be disclosed for the financial year 2017.
In order to enhance the Executive Board's long-term
focus and share ownership in Randstad, 25% of the net
annual bonus (paid out based on realized performance)
will be paid out in Randstad shares. After three years,
these shares will be matched 1:1 subject to a sustainable
performance of the company during the previous three
years and at the discretion of the Supervisory Board. In
this context, sustainable performance means that
during these three years, Randstad has progressed to
achieve its strategic and financial targets, made a profit,
and paid dividends to shareholders. The assessment of
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the Supervisory Board as to whether this sustainable
performance was realized will be disclosed in the annual
report. This disclosure will first be made in the annual
report for the financial year 2020, referring to the three-
year performance period 2018–2020. Members of the
Executive Board are allowed to voluntarily convert up to
50% of their net annual bonus according to the same
matching principles. Randstad shares need to be held
for at least 5 years after the conditional award date,
except for any share sales needed to settle related tax
liabilities.
If a variable remuneration component conditionally
awarded in a previous year would, in the opinion of the
Supervisory Board, produce an unfair result due to
extraordinary circumstances during the performance
period, the Supervisory Board has the power to adjust
the value upward or downward. The Supervisory Board
may also recover from the Executive Board any variable
remuneration awarded on the basis of incorrect
financial or other data. These provisions are included in
the annual bonus and grant letter. This power was not
used in 2017, nor was any remuneration recovered from
present or former Executive Board members.
Based on the achievement of the targets for 2017, the
bonus entitlement with regard to performance in 2017
as a percentage of annual base salary can be specified
as follows:
annual bonus payout, 2017
2017 performance target
possible
maximum
payout as % of annual
base salary
Group revenue performance
35%
35%
Group EBITA margin
25%
14%
Debtor days
15%
0%
Team targets
25%
18%
100%
67%
long-term compensation
To enhance alignment with the value creation objectives
of shareholders, performance shares are granted to the
members of the Executive Board on an annual basis.
The grant is dependent on Total Shareholder Return
(TSR) and non-financial Key Performance Indicators
(KPIs). TSR reflects the return received by a shareholder
and captures both the change in the company's share
price and the value of dividend income, assuming
dividends are reinvested in the company. TSR is an
appropriate measure, as it objectively measures the
company's financial performance and assesses its long-
term value creation as compared to other companies in
the sector. TSR performance for the companies of the
international performance peer group is calculated
based on their 'home/primary listing'. TSR data are
compiled and reported by external data provider Towers
Watson. Given the relevance of certain non-financial
KPIs for Randstad's business, ambition, and long-term
viability, five targets are added at the discretion of the
Supervisory Board. These targets are also set at the start
of the three-year vesting period.
Randstad is undergoing a transformation to meet and
beat the challenges of the global trends away from its
traditional business base. This implies a major shift in
focus toward new world-wide categories and concepts,
and requires an agile organization. At the same time,
Randstad aims to continuously improve the way it
delivers societal and company values. As a result, the
Supervisory Board felt it appropriate to focus a larger
part of long-term compensation on the achievement of
the transformational strategies. As of 2017, the
weighting for the long-term incentive was therefore
rebalanced to 65% TSR (previously 80%) and 35% non-
financial KPIs (previously 20%).
The international performance peer group is used to
establish relative TSR performance. Until 2017, the peer
group included 10 staffing/recruitment companies.
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As of 2017, Synergie and TrueBlue have been excluded, as
they operate primarily locally, and the peer group has been
extended from 10 to 19 companies, adding cyclical, asset-
light business services companies (Capita, On
Assignment, G4S, ISS, Compass Group, Rexel, Securitas,
Office Depot, WW Grainger, Sodexo, and Staples). The
related payout range has been changed as follows:
payout per ranking position for the TSR performance incentive zone
Ranking
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Current %
-
-
-
-
-
-
-
-
-
0
0
0
0
0
50
100
150
200
250
Proposed %
0
0
0
0
0
0
0
0
0
50
75
100
100
125
150
150
175
200
200
All payout results and calculations will continue to be
audited by our external auditor.
Performance shares are granted in the open period
following the publication of the Group's fourth-quarter
financial results in February. The number of shares will
be calculated based on the fair value of the Randstad
share as at January 1. At the moment the performance
shares are granted, their fair value assuming on-target
performance is equal to an amount of 100% of the base
salary for all Executive Board members alike. If a
member of the Executive Board resigns before the
vesting date, conditional grants of performance shares
will in principle lapse or, for example, in the case of
retirement due to reaching pensionable age, will vest
pro rata related to the performance period in service.
Performance shares need to be retained for at least two
years after vesting, except to the extent necessary to
settle any related tax liabilities.
Prior to the grant, and following the advice of the
Remuneration and Nomination Committee, the
Supervisory Board analyzes the possible outcomes of
the allocation by looking at a number of scenarios for
the performance period.
On February 14, 2017 (the grant date under the relevant
plan), a conditional grant of performance shares for on-
target performance was made, based on 100% of the
annual base salary per Executive Board member as at
January 1, 2017, and on the fair value of the performance
shares as at grant date of € 46.88 per share (TSR-
dependent grant) and € 42.68 per share (non-financial/
sustainability-related grant).
TSR payout range
Position 1
250%
Position 2
200%
Position 3
150%
Position 4
100%
Position 5
50%
Position 6
0%
Position 7
0%
Position 8
0%
Position 9
0%
Position 10
0%
Until 2017, the related payout range is as follows:
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The conditional on-target awards for 2017 are as follows:
conditional on-target awards, 2017
number of
shares
Jacques van den Broek
22,066
Robert Jan van de Kraats
15,986
François Béharel
14,043
Linda Galipeau
14,043
Chris Heutink
14,043
The non-financial targets for the 2017 grant are the
following five targets from Randstad's strategic
business plans and reporting framework:
• Net Promoter Score (NPS): a Top 3 position or at least
position improvement in the Top 12 countries over the
performance period;
• employee engagement: at least 80% participation and
outperformance of the benchmark annually;
• growth in Professionals above market compared to
Randstad's key competitors;
• growth in permanent placements above market
compared to Randstad's key competitors; and
• a target related to Randstad's digital strategy, which
cannot be disclosed at this stage.
At the end of the performance period 2017−2019, the
Supervisory Board will have the discretion to determine
the actual vesting based on progress made over the
performance period as reported by the Executive Board
in relation to each of these targets. Each target accounts
for a maximum of 50% vesting. The total minimum
vesting equals 0%, and the maximum vesting equals
250%.
At the beginning of 2017, the performance shares that
had been conditionally granted in February 2014 vested
based on the relative TSR performance (80% of the
allocation) over the period January 1, 2014, to December
31, 2016. TSR performance resulted in 150% vesting. The
performance on the non-financial targets (20% of the
allocation) over this period resulted in 130% vesting. The
total payout ratio for both grants is 147%.
pension, other benefits, and internal pay
ratio
pension contribution
The pension arrangements for members of the
Executive Board are based on defined contribution.
Randstad provides an annual contribution of 27% of base
salary to the schemes of Executive Board members. For
Netherlands-based members, this contribution includes
compensation for limitations of accrual of pension rights
as of 2016. For the France-based member, this
contribution includes compensation to cover health and
long-term disability insurance, life insurance,
contributions to any other pension scheme, and certain
social security charges. For the US-based member, this
contribution includes compensation to cover health and
long-term disability insurance, life insurance, and
contributions to the 401(k) plan or any other pension
scheme. The company has no specific early retirement
arrangements in place for Executive Board members.
other benefits
Additional arrangements include expense and
relocation allowances, a company car or car allowance,
and health and accident insurance.
loans
The company has issued no loans or guarantees to
Executive Board members.
severance
In the event of severance, a maximum of one year's
annual base salary, in addition to the 12-month notice
period, applies to all Executive Board members.
executive service agreements
In line with the relevant regulation, Executive Board
members have a four-year executive service agreement
with the company, which supersedes any previous
employment agreements.
appointment terms
The members of the Executive Board are appointed for
a period of four years.
internal pay ratio 2017
The internal pay ratio between the average pay of
Randstad employees vis-à-vis the average pay of the
CEO and the Executive Board members is calculated
based on the average 2017 remuneration (including
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variable pay and long-term incentives) of a reference
group (our 14 largest countries and the corporate
functions encompassing 90% of Group revenue and
79% of total headcount) vis-à-vis the 2017 base salary,
annual bonus and LTI costs of the Executive Board
members. The pay ratio is 52:1 (2016: 48:1) for the CEO
and on average 38:1 (2016: 36:1) for the Executive Board
members.
executive board
remuneration 2018
In line with the company's remuneration policy, it was
decided to increase the base salaries of the Executive
Board members by 3.5% as of January 1, 2018, except for
the CEO, whose salary was not increased but kept at the
level agreed upon when he was appointed as CEO. The
general pay differentials within the company, and
specifically within senior management, were taken into
account when taking this decision.
For 2018, the financial targets and their relative
weighting have been set as follows:
• revenue, with market share validation: the bonus
opportunity ranges from 12.5% of base salary for
minimum performance to 20% for on-target
performance and 30% for maximum performance.
• EBITA margin: the bonus opportunity ranges from
12.5% of base salary for minimum performance to 20%
for on-target performance and 30% for maximum
performance.
• debtor days: the bonus opportunity ranges from 5% of
base salary for minimum performance to 10% for on-
target performance and 15% for maximum
performance.
Detailed numerical targets cannot be disclosed, as these
are share price and competition sensitive.
To further underline joint responsibility, at the start of
each financial year, following a presentation by the
Executive Board, the Supervisory Board sets annual
strategic and operational objectives. This bonus
opportunity will at maximum be 25% of base salary.
These targets will only be disclosed if they are not share
price or competition sensitive. As they are for 2018,
these targets cannot yet be further specified.
supervisory board
remuneration 2017 and
2018
Information with regard to the remuneration of the
Supervisory Board in 2017 is included in the section
report of the supervisory board. An overview of the 2017
and comparable 2016 remuneration amounts is
included in note 24 to the financial statements.
The remuneration of the Supervisory Board, including its
Committees, will remain unchanged in 2018.
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corporate governance.
principles
Sound corporate governance is a key component of
Randstad's culture and is consistent with its core values.
Randstad's corporate governance is supported by a
strong focus on integrity, transparency, and clear and
timely communication. Good governance and proper
supervision are important prerequisites for generating
and maintaining trust in Randstad and its management.
Randstad is incorporated and based in the Netherlands.
As a result, Randstad's governance structure is based on
the requirements of Dutch legislation, the company's
Articles of Association, complemented by internal
policies and procedures. Given the worldwide exposure
of its businesses, the international context is of vital
importance, and international developments are closely
monitored.
Randstad has always sought to enhance its governance
in line with the Dutch Corporate Governance Code ('the
Code') and international best practices. In the past
years, we have closely followed the proposal of the
Monitoring Committee Corporate Governance Code to
draw up the Code 2016. At the upcoming Annual
General Meeting of Shareholders on March 27, 2018,
compliance with the Code will be tabled as a separate
agenda item for discussion. Any future, substantial
changes in Randstad's corporate governance structure
will be submitted to the Annual General Meeting of
Shareholders.
Randstad has a two-tier board structure, requiring a
well-managed relationship between the Executive
Board and the Supervisory Board. The two Boards have
specific responsibilities. The Supervisory Board
oversees and advises the Executive Board in performing
its management tasks and guides its general
development, including the financial policies and
corporate structure. The Supervisory Board has the
employer role for the members of the Executive Board.
In performing their duties, the members of the
Supervisory Board are guided by the interests of
Randstad and all its stakeholders. The role of the
Supervisory Board has grown in recent years, and now
requires Board members to play a more prominent and
active role, thinking along with and advising the
Executive Board on key matters, such as strategic
processes, important operational decisions,
organizational structure, and senior management
development.
corporate governance declaration
The Executive Board and the Supervisory Board, which
are jointly responsible for the corporate governance
structure of Randstad, are of the opinion that all of the
principles and best-practice provisions of the Code are
being applied. We strongly believe that these principles
and provisions are consistent with our core values. This
means that we do not merely take a 'box ticking'
approach to compliance. This report also includes the
information that needs to be disclosed in accordance
with the corporate governance declaration as referred
to in the relevant Dutch governmental decree.
executive board
Tasked with the overall management of Randstad, the
Executive Board is accountable for developing and
executing the strategy. The Executive Board is also
responsible for the associated risk profile, financial
controls, the development of results, and the resolution
of corporate responsibility issues, while simultaneously
respecting policies that have been set. The
responsibility for the management of Randstad is vested
collectively in the Executive Board. Each member has
duties related to the specific area of responsibilities and
expertise. The Company Secretary acts as secretary to
the Executive Board.
The Supervisory Board is empowered to recommend to
the Annual General Meeting of Shareholders candidates
to be appointed to the Executive Board. The Supervisory
Board determines the remuneration of the members of
the Executive Board, in accordance with the
remuneration policy adopted by the Annual General
Meeting of Shareholders.
Board members have been appointed for a maximum
term of four years. The division of tasks between the
members of the Executive Board requires the approval
of the Supervisory Board. Members need the prior
approval of the Supervisory Board before they can take
up a board position at another company. A member of
the Executive Board may not be a member of the
Supervisory Board of more than two listed companies or
serve as Chair of the Supervisory Board of another listed
company.
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corporate governance.
supervisory board
The Supervisory Board supervises and advises the
Executive Board in performing its management tasks,
sets the direction of the Randstad business and guides
its general development, including the financial policies
and corporate structure. It evaluates the strategy,
development of results, operating model, and
sustainability framework established under the
Executive Board's management. Major management
decisions require the approval of the Supervisory Board.
The Supervisory Board further supervises the structure
and management of systems of internal business
controls and the financial reporting process.
The Supervisory Board is empowered to recommend to
the Annual General Meeting of Shareholders candidates
to be appointed to the Supervisory Board. Such
appointments are considered on the basis of a profile,
taking into account the nature of Randstad's activities
and the desired background and expertise of
candidates. Diversity is an important criterion in order to
establish a balance in nationality, gender, age,
experience, and background of the individual members.
The Supervisory Board aims for at least one-third of its
membership to meet the diversity criteria. Members of
the Supervisory Board should limit the number of
Supervisory Board memberships and other positions
they may hold at listed and non-listed companies in such
a way as to guarantee the proper performance of his or
her duties, and may not hold more than five Supervisory
Board memberships in Dutch companies or other large
organizations, whereby a Chair counts as two
memberships. Supervisory Board remuneration is
determined by the Annual General Meeting of
Shareholders and not linked to the company's results.
Randstad ensures that there are structured reporting
lines to the Supervisory Board. The Supervisory Board
meets regularly throughout the year, according to a pre-
arranged schedule, both with and without the Executive
Board and senior management. Through frequent
informal consultation with and updates from the
members of the Executive Board in between the
meetings, the Supervisory Board remains well informed
about the general state of affairs within Randstad. At the
end of each year, the Supervisory Board extensively
assesses the composition, performance, and
functioning of the Executive Board and the Supervisory
Board, as well as their individual members.
The Chair of the Supervisory Board ensures the proper
functioning of the Board and its Committees, and acts
as the main contact for the Executive Board. The Vice-
Chair replaces the Chair when required, and acts as the
contact for the other Board members on matters
relating to the functioning of the Chair. The Company
Secretary acts as secretary to the Supervisory Board.
supervisory board committees
While the Supervisory Board retains overall
responsibility for its functions, it assigns some of its
tasks to three Committees: the Audit Committee, the
Strategy Committee, and the Remuneration and
Nomination Committee. Their advice and
recommendations assist the Supervisory Board in its
decision-making. All Supervisory Board members are, in
principle, also members of at least one but no more than
two Committees.
The Audit Committee assists the Supervisory Board in
fulfilling its supervisory responsibilities for the integrity
of the financial reporting process, the system of internal
business controls and risk management, and the
external audit process. The Committee assesses the
audit plan and the scope and approach of the external
auditor, and monitors progress and performance. The
relationship with the external auditor is evaluated
annually. Together with the Executive Board, the Audit
Committee reviews quarterly and full-year financial
statements, auditor's reports and the management
letter. The internal risk and control framework and tax-
and treasury-related activities are recurring topics. The
Audit Committee may opt to meet separately with the
external auditor to discuss the quality of financial
reporting and cooperation with the finance
departments.
The Strategy Committee acts as a sparring partner for
the Executive Board and contributes in depth to the
preparation of the annual discussion of Randstad's
strategy with the full Supervisory Board.
The Remuneration and Nomination Committee makes
recommendations regarding the remuneration policy
for the Executive Board and the Supervisory Board, for
adoption by the Annual General Meeting of
Shareholders. The approved policy then forms the basis
for the fixed and variable remuneration of the Executive
Board. The Committee is also tasked with advising on
candidates to fill vacancies in the Executive Board and
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corporate governance.
Supervisory Board, evaluating the performance of both
Boards and their members, reviewing the company's HR
strategy and development of senior management, and
ensuring long-term succession planning.
As from 2018, the Supervisory Board will discontinue the
Strategy Committee and Remuneration and Nomination
Committee and install a Governance and Nomination
Committee and a Remuneration Committee. Please
refer to the Report of the Supervisory Board for further
details.
board compliance
Both Boards, including the Committees of the
Supervisory Board, have their own by-laws or terms of
reference, which set rules regarding objectives,
composition, responsibilities, and working methods.
These by-laws are available on our website.
Any conflict of interest between Randstad and a Board
member should be avoided. Any actual or potential
conflict of interest must be reported immediately to the
other Board members and/or the Chair of the
Supervisory Board. Any shareholding in the company
must be for the purpose of long-term investment. Board
members must at all times comply with the provisions
contained in the Randstad insider dealing rules. These
rules include, among other items, a policy that stipulates
that dealings in Randstad shares and options by Board
members should normally be restricted to the four
weeks following the publication of quarterly financial
results, provided that the person involved is not in
possession of any inside information at that time.
diversity policy
Randstad has a general diversity and inclusion policy,
where the global goals are set. Randstad aims to develop
and sustain a culture of inclusion and fairness where
every employee and candidate feels valued and revered
for their ideas, background and perspective. Randstad
values diversity and does not discriminate on grounds
of age, color, disability, gender, marital status,
nationality, race, religion or sexual orientation or any
other irrelevant or illegal characteristics. This diversity
and inclusion policy also applies to the Executive Board
and Supervisory Board.
Randstad aims to ensure that the members of the
Executive Board and Supervisory Board represent a
good balance in terms of diversity which includes
diversity of background, skills, working experience age,
nationality and gender, among other criteria. It is
recognised that diversity enables the boards to look at
issues and to solve problems in a different way, to
respond differently to challenges and to take more
robust decisions. All these different skills and
backgrounds collectively represented in the boards
reflect the diverse nature of the environment in which
Randstad and its stakeholders operate, and improve the
effectiveness through diversity of approach and
thought. It is furthermore acknowledged that diversity
drives innovation and accelerates growth. It enables
Randstad to attract and maintain the best talented
people.
The Executive Board and the Supervisory Board
collectively are considered diverse and balanced from
an educational background, work experience, and
nationality. The Boards consist of people with a good
mix of sector knowledge, financial expertise, and
management capabilities.
Annually, the Supervisory Board assesses the size and
composition of the Supervisory Board and of the
Executive Board, and agrees to measurable objectives
for achieving diversity on the Boards. In 2018 a diversity
policy will be drawn up for the Executive Board and the
Supervisory Board with regard to the composition of
these boards to address in more detail the diversity
aspects that are relevant to the boards.
The Supervisory Board aims to at least comply with the
Dutch Civil Code that requires 30% of its membership to
be female, a criterion that is taken into consideration for
each vacancy. The result is that for the current
Supervisory Board two of the seven members are
female. The search for appointment of a new
Supervisory Board member also identified and
presented a very qualified female, Annet Aris.
In respect of the Executive Board, currently one of the
five members is female. Randstad aims for 30% of the
members of the Executive Board to be female. This
criterion was taken into consideration for the candidates
for the new CFO as successor of Robert Jan van de
Kraats. However after a thorough search process
(including female candidates) and after careful
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corporate governance.
consideration, the Supervisory Board decided that it
was in the best interest of Randstad to choose for the
best person for the job and selected Henry Schirmer as
its candidate.
annual general meeting of
shareholders
Important matters that require the approval of the
(Annual) General Meeting of Shareholders are:
• adoption of the annual accounts;
• adoption of profit appropriation and additions to
reserves;
• dividends;
• significant changes to the company's corporate
governance;
• remuneration policy of the Executive Board;
• remuneration of the Supervisory Board;
• discharge from liability of the Executive Board for its
management;
• discharge from liability of the Supervisory Board for its
supervision of the management;
• appointment of the external auditor;
• appointment, suspension, or dismissal of the members
of the Executive Board and the Supervisory Board;
• authorization to purchase, issue, or sell shares in the
Group's capital;
• adoption of amendments to the Articles of Association.
Further details about the proposals that the Executive
Board or the Supervisory Board can submit to the
meeting and the procedure according to which
shareholders themselves can submit matters for
consideration by the meeting are specified in the
company's Articles of Association.
The Annual General Meeting of Shareholders, which is
normally held at the end of March or in early April, is
broadcast live by audio webcast via our website. As
specified in the notice for the meeting, voting
instructions (anonymous if desired) can be given to an
independent third party in advance of the meeting.
Within three months of the meeting, the draft minutes
of the meeting are made available for three months for
comments. The definitive minutes are published on our
website.
voting rights
The issued share capital of Randstad currently consists
of 183.3 million ordinary shares, 25.2 million preference
shares B, 14.6 million preference shares C1, and
35.6 million preference shares C2. The ordinary shares
have equal voting rights ('one share, one vote'). The
voting rights on the preference shares are aligned with
the capital contribution upon issuance. Effective at a
Shareholders' meeting, the voting rights on the
preference shares B are 3.6 million, and the voting rights
on the preference shares C are 5.6 million.
The foundation Stichting Administratiekantoor
Preferente Aandelen Randstad Holding holds the
preference shares B and C. The foundation's Board
consists of Bas Kortmann (Chair), Stépan Breedveld, and
Sjoerd van Keulen. The Board members are fully
independent. The foundation's Articles of Association
were compiled in accordance with Annex X, Euronext
Amsterdam Rule Book, Book II. Depository receipts
issued by the foundation are held by, among others,
Nationale Nederlanden NV, ASR NV, Richmond, and
Randstad Beheer BV. Although the voting rights
attached to the preference shares are vested in the
foundation, each depositary receipt holder can ask for a
proxy to exercise the voting rights underlying his or her
depositary receipts during a Shareholders' Meeting.
Randstad may issue preference shares A to a legal entity
charged with safeguarding the company's interests and
preventing influences that may threaten its continuity,
independence, or identity. To date, no such shares have
been issued. Resolutions for such an issue would require
the cooperation of the Annual General Meeting of
Shareholders.
As at December 31, 2017 the holders of approximately
95.8% of ordinary shares have been able to make
unrestricted use of their voting rights. The other 4.2% of
ordinary shares have been converted into depository
receipts. A foundation, Stichting Administratiekantoor
Randstad Optiefonds, holds those shares, in which the
attached voting rights are vested. The depository
receipts issued by Stichting Administratiekantoor
Randstad Optiefonds are fully exchangeable into
ordinary shares, and are held by Stichting Randstad
Optiefonds. Frits Goldschmeding, the company's
founder, is the sole Board member of Stichting
Administratiekantoor Randstad Optiefonds.
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corporate governance.
internal risk management and control
systems
A detailed description of Randstad's Risk & Control
framework, including a description of the most
important risk management and control systems, is
given in the section 'Risk & opportunity management'.
legal transparency
obligations
The information that needs to be disclosed under Article
10, Takeover Directive Decree, and section 391, sub-
section 5, book 2 of the Dutch Civil Code is available in
various sections of this annual report. In this section, we
provide additional information or indicate where the
information can be found.
a. capital structure and attached rights and duties
An overview of the company's capital structure, voting
rights and dividend policy is provided in the section 'our
value for investors' of this annual report.
b. statutory or contractual restrictions on share
transfers
Approximately 32.1% of the total share capital (3.0%
ordinary shares, 9.7% preference shares B, and 19.4% of
preference shares C) has been converted into
depository receipts (see section Voting rights). The
transfer of depositary receipts of preference shares
requires the approval of the Executive Board and the
Supervisory Board.
c. major shareholders
Shareholders are obliged to give notice of interests
exceeding certain thresholds to the Netherlands
Authority for the Financial Markets (AFM). Almost all the
holdings listed below are a combination of (depositary
receipts of) ordinary shares and (depositary receipts of)
preference shares. All transactions between Randstad
and holders of at least 10% of the total number of shares
are agreed on terms that are customary in the sector
concerned. (See the section on Related-party
transactions in the financial statements). This means
that best-practice provision 2.7.5. of the Dutch
Corporate Governance Code has been observed.
major shareholders
2017
2016
F.J.D. Goldschmeding
30%-40%
30%-40%
Stichting Administratiekantoor
Preferente Aandelen Randstad Holding1
25%-30%
25%-30%
NN Group1
10%-15%
10%-15%
ASR1
5%-10%
5%-10%
Richmond1
5%-10%
5%-10%
Stichting Randstad Optiefonds
3%-5%
3%-5%
Stichting Administratiekantoor
Randstad Optiefonds
3%-5%
3%-5%
1 Mainly based on preference shares (Stichting Administratiekantoor Preferente
Aandelen Randstad Holding) or depositary receipts of such shares (NN Group,
ASR, Richmond).
d. special rights of control
The company has not issued special rights of control to
specific shares or shareholders. Preference shares A can
be issued, but only with the approval of the Annual
General Meeting of Shareholders.
e. control mechanisms relating to option plans, share
plans, and share purchase plans
The following share-based payment arrangements are
in effect: a performance stock option plan for the
Executive Board, two performance share plans (one for
the Executive Board members and one for senior
management), and a share purchase plan for all
corporate employees. The relevant characteristics of
these plans can be found in the notes to share-based
payments.
f. voting limitations
Holders of depository receipts of ordinary shares have
no voting rights.
g. agreements with shareholders that can limit the
transfer of shares or voting rights
In February 2016, Randstad signed a continuity
agreement with its founder Frits Goldschmeding
through his private holding company Randstad Beheer,
replacing the previous agreement from 2007. The new
agreement relates to the creation of a future-proof
structure, independent of the life and involvement of
individuals. This means Randstad Beheer is committed
to Randstad for the long term, safeguarding the heritage
and spirit of Frits Goldschmeding and the values
bestowed on the company, now and in the future.
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corporate governance.
As a result of an amendment to its Articles of
Association, the purpose of Randstad Beheer will be to
safeguard the continuity of its shareholding for the
longer term, its strategic position and to promote the
sustainable success and development of Randstad. This
is in line with the current modus operandi. The long-term
involvement of Randstad Beheer is reflected by its right
to one seat on Randstad’s Supervisory Board, provided
Randstad Beheer holds a stake in Randstad Holding of
at least 25% (which is currently the case).
As the 2007 agreement included a notice period for
possible changes, the new continuity agreement also
includes an arrangement that ensures a careful
consultation process if Randstad Beheer at some point
considers to amend the purpose of its Articles of
Association and if Randstad Beheer's voting rights in
Randstad Holding are at that point at least 25%. In the
event Randstad Beheer decides to amend its purpose at
the end of that process, Randstad Beheer and Randstad
Holding will reasonably consult on the new situation and
the potential reduction of Randstad Beheer's
shareholding in Randstad, and Randstad Holding will
assist in such reduction if and when it occurs.
In line with the intent of the previous agreement, the
new agreement ensures that, if Randstad Beheer's
voting rights fall below 25% or it has the intention to do
so, Randstad Holding and Randstad Beheer will discuss
potential consequences for Randstad Holding's
governance aimed at safeguarding Randstad's
development, continuity and strategic position in the
new share ownership structure.
h. regulations concerning the appointment and
dismissal of board members and changes to the articles
of association
Members of the Executive Board and Supervisory Board
are appointed by, and may at any time be suspended or
dismissed by, the Annual General Meeting of
Shareholders. A Supervisory Board member is eligible
for reappointment twice. Resolutions with respect to
appointment and dismissal are passed by an absolute
majority of the votes cast. If an amendment to the
Articles of Association is proposed to the Annual
General Meeting of Shareholders, this is always stated
in the convening notice for that meeting. A copy of the
proposal, containing the verbatim text of the proposed
amendment, is simultaneously deposited at the
company's head office, for perusal by every
shareholder, as well as by every holder of depository
receipts, until the end of the meeting. Copies are made
available free of charge. Amendments to the Articles of
Association involving changes to the special rights
accruing to the holders of preference shares require the
approval of the holders of preference shares concerned
at the meeting.
i. authority of the executive board, especially to issue
and repurchase shares in the company
Subject to the approval of the Supervisory Board, the
Executive Board is authorized to issue shares, grant
subscription rights, and restrict or exclude pre-emptive
rights for holders of ordinary shares until September 30,
2018, for an annual maximum of 3% of the issued share
capital of the company. This issuance will mainly be for
the purposes of the performance stock option and share
plans pertaining to the Executive Board and senior
management. The Executive Board is also authorized,
subject to the approval of the Supervisory Board, to
repurchase shares until September 30, 2018, for an
annual maximum of 10% of the issued share capital of
the company. The repurchase will be for the purposes
of the performance share plans pertaining to the
Executive Board and senior management.
j. change of control arrangements
Change of control provisions have been included in the
company's revolving syndicated credit facility, as well
as the company's performance share and option plans
for the Executive Board and senior management, and
the share purchase plan for corporate employees.
k. agreements with board members or employees
The severance payment for all members of the Executive
Board has been set at a maximum of one annual base
salary in addition to the notice period of 12 months.  
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supplementary information
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contents
consolidated financial statements
125 consolidated statement of comprehensive income.
126 consolidated statement of financial position at
december 31.
127 consolidated statement of cash flows.
128 consolidated statement of changes in equity.
main notes to the consolidated financial
statements
129 1 general information
129 2 summary of significant accounting policies
130 3 capital and financial risk management
136 4 critical accounting policies, judgments, estimates,
and assumptions
146 5 segment reporting
149 6 business combinations
151 7 earnings per ordinary share
notes to the consolidated income
statement
152 8 cost of services and total operating expenses
154 9 total wages and salaries, social security and pension
charges
154 10 net finance costs
155 11 net income
155 12 total other comprehensive income
notes to the consolidated statement of
financial position
156 13 property, plant and equipment
157 14 software
158 15 acquisition-related intangible assets
159 16 financial assets
161 17 associates
161 18 trade and other payables
162 19 total equity and dividends per share
164 20 other liabilities
notes to the consolidated statement of
cash flows
165 21 statement of cash flows
other notes to the consolidated financial
statements
168 22 subsidiaries
170 23 share-based compensations
172 24 related-party transactions
175 25 employee benefit obligations
178 26 number of employees (average)
178 27 commitments
179 28 auditors' fees
179 29 events after balance sheet date
company financial statements
180 income statement
181 statement of financial position at december 31
notes to the company financial statements
182 1 accounting policies for the company financial
statements
182 2 revenue
182 3 software
182 4 subsidiaries
183 5 long-term loans receivable from subsidiaries
183 6 receivables
183 7 shareholders' equity
183 8 borrowings
184 9 trade and other payables
184 10 number of employees (average)
184 11 remuneration
184 12 related parties
184 13 guarantees and commitments
185 14 auditors' fees
other information
186 provisions in the Articles of Association
concerning profit appropriation
189 independent auditor's report
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supplementary information
consolidated financial statements.
consolidated statement
of comprehensive income.
The notes on pages 129 to 179 are an integral part of these consolidated financial statements.
In millions of € unless otherwise indicated
note
page
2017
2016
Revenue
4.4
145
23,272.8
20,684.1
Cost of services
8.1
152
18,567.3
16,749.9
Gross profit
5.1
146
4,705.5
3,934.2
Selling expenses
8.2
152
2,592.3
2,092.6
Amortization and impairment of acquisition-related intangible assets
and goodwill
8.4
153
134.0
101.4
Other general and administrative expenses
8.2
152
1,119.5
949.6
General and administrative expenses
1,253.5
1,051.0
Total operating expenses
8.2
152
3,845.8
3,143.6
Operating profit
5.1
146
859.7
790.6
Finance income
10
154
10.8
18.8
Finance expenses
10
154
(33.3)
(22.6)
Net finance costs
10
154
(22.5)
(3.8)
Share in profit/(loss) of associates
17
161
1.2
(0.8)
Income before taxes
838.4
786.0
Taxes on income
4.3
142
(207.0)
(197.8)
Net income
11
155
631.4
588.2
Items that subsequently may be reclassified to the income statement
12
155
(182.8)
16.2
Items that will never be reclassified to the income statement
12
155
18.4
(6.2)
Total other comprehensive income, net of taxes
12
155
(164.4)
10.0
Total comprehensive income
467.0
598.2
Net income attributable to:
Holders of ordinary shares of Randstad Holding nv
618.8
575.4
Holders of preference shares of Randstad Holding nv
12.6
12.6
Equity holders
631.4
588.0
Non-controlling interests
0.0
0.2
Net income
631.4
588.2
Earnings per share attributable to the holders of ordinary shares of
Randstad Holding nv (expressed in € per ordinary share)
Basic earnings per ordinary share (€)
7
151
3.38
3.15
Diluted earnings per ordinary share (€)
7
151
3.36
3.13
Total comprehensive income attributable to:
Holders of ordinary shares of Randstad Holding nv
454.4
585.4
Holders of preference shares of Randstad Holding nv
12.6
12.6
Equity holders
467.0
598.0
Non-controlling interests
0.0
0.2
Total comprehensive income
467.0
598.2
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consolidated financial statements.
consolidated statement of
financial position at december 31.
The notes on pages 129 to 179 are an integral part of these consolidated financial statements.
In millions of €
note
page
2017
2016
assets
Property, plant and equipment
13
156
154.3
165.3
Software
14
157
80.1
67.2
Goodwill
4.1
136
3,077.3
2,933.1
Acquisition-related intangible assets
15
158
398.2
353.2
Intangible assets
3,555.6
3,353.5
Deferred income tax assets
4.3
142
437.9
520.2
Financial assets
16
159
507.7
435.6
Associates
17
161
21.9
19.1
Non-current assets
4,677.4
4,493.7
Trade and other receivables
3.2
131
4,680.0
4,174.2
Income tax receivables
4.3
142
79.2
72.2
Cash and cash equivalents
3.2
131
326.3
385.8
Current assets
5,085.5
4,632.2
Total assets
5.2
147
9,762.9
9,125.9
equity and liabilities
Issued capital
25.9
25.8
Share premium
2,284.3
2,270.7
Reserves
1,309.4
1,255.6
Net income for the year
631.4
588.0
Shareholders' equity
19.1
162
4,251.0
4,140.1
Non-controlling interests
19.3
163
0.7
0.7
Total equity
4,251.7
4,140.8
Borrowings
3.2
131
639.5
699.2
Deferred income tax liabilities
4.3
142
44.1
42.2
Provisions
4.2
140
71.4
75.3
Employee benefit obligations
4.2
140
114.7
119.1
Other liabilities
20
164
10.6
12.6
Non-current liabilities
880.3
948.4
Borrowings
3.2
131
712.5
480.0
Trade and other payables
18
161
3,694.3
3,397.5
Income tax liabilities
4.3
142
116.2
70.6
Provisions
4.2
140
72.2
68.7
Employee benefit obligations
4.2
140
13.3
13.2
Other liabilities
20
164
22.4
6.7
Current liabilities
4,630.9
4,036.7
Total liabilities
5,511.2
4,985.1
Total equity and liabilities
9,762.9
9,125.9
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consolidated financial statements.
consolidated statement
of cash flows.
The notes on pages 129 to 179 are an integral part of these consolidated financial statements.
In millions of €
note
page
2017
2016
Operating profit
859.7
790.6
Amortization and impairment of acquisition-related intangible assets
8.4
153
134.0
101.4
Operating profit before amortization and impairment of acquisition-related intangible
assets and goodwill (EBITA)
5.1
146
993.7
892.0
Depreciation/amortization and impairment of property, plant, equipment and software
8.3
153
86.9
74.1
Operating profit before depreciation, amortization and impairment (EBITDA)
5.1
146
1,080.6
966.1
Provisions
4.2
140
(12.0)
(7.9)
Employee benefit obligations
25
175
19.7
7.7
Share-based compensations
23.5
172
32.5
31.3
Loss on disposals of property, plant and equipment
13
156
1.0
0.2
Other items
21.4
166
(72.3)
(108.4)
Cash flow from operations before operating working capital and income taxes
1,049.5
889.0
Trade and other receivables
21.2
166
(447.9)
(366.4)
Trade and other payables
21.3
166
272.7
196.9
Operating working capital
(175.2)
(169.5)
Corporate income taxes
21.5
166
(186.2)
(159.8)
Net cash flow from operating activities
688.1
559.7
Additions to property, plant and equipment, and software
13, 14
156, 157
(107.3)
(97.2)
Acquisition of subsidiaries
6.1
149
(348.2)
(571.8)
Acquisition of equity investments, joint ventures and associates
16.2, 17
160, 161
(8.0)
(9.6)
Loans and receivables
16.1
159
(6.8)
(1.1)
Disposals of property, plant and equipment
13
156
11.6
3.2
Disposal of subsidiaries/activities
6.2
151
-
0.7
Dividends from associates
17
161
1.3
-
Net cash flow from investing activities
(457.4)
(675.8)
Issue of new ordinary shares
19.1
162
1.1
0.1
Purchase of own ordinary shares
19.1
162
(38.6)
(35.8)
(Repayments of) / drawings on syndicated loan
3.2
131
(145.2)
552.9
Repayments of other non-current borrowings
3.2
131
(147.9)
(87.4)
Issuance of promissory note
3.2
131
150.0
-
Net financing
(180.6)
429.8
Finance income
10
154
3.8
3.2
Finance expenses
10
154
(21.5)
(15.0)
Dividend on ordinary and preference shares
19.2
163
(358.9)
(319.8)
Net reimbursement to financiers
(376.6)
(331.6)
Net cash flow from financing activities
(557.2)
98.2
Net (decrease) in cash, cash equivalents and current borrowings
(326.5)
(17.9)
Cash, cash equivalents and current borrowings at January 1
21.1
165
(52.8)
(48.6)
Net movement in cash, cash equivalents and current borrowings
(326.5)
(17.9)
Translation and currency gains
(6.9)
13.7
Cash, cash equivalents and current borrowings at December 31
21.1
165
(386.2)
(52.8)
Free cash flow
21.6
167
585.6
464.6
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supplementary information
consolidated financial statements.
consolidated statement
of changes in equity.
The notes on pages 129 to 179 are an integral part of these consolidated financial statements.
in millions of €
issued
capital
share
premium
reserves1
net
income
share-
holders'
equity
non-
controlling
interests
total
equity
treasury
shares
translation
and other
share-
based
payments
employee
benefits
retained
earnings
Balance at January 1, 2017
25.8
2,270.7
(28.7)
221.6
54.2
(47.1)
1,055.6
588.0
4,140.1
0.7
4,140.8
Net income
-
-
-
-
-
-
-
631.4
631.4
0.0
631.4
Total other comprehensive income
-
-
-
(182.0)
-
17.6
-
-
(164.4)
0.0
(164.4)
Total comprehensive income
-
-
-
(182.0)
-
17.6
-
631.4
467.0
0.0
467.0
Transactions with owners:
Dividend 2016 on ordinary shares
-
-
-
-
-
-
229.1
(575.4)
(346.3)
-
(346.3)
Dividend 2016 on preference shares
-
-
-
-
-
-
-
(12.6)
(12.6)
-
(12.6)
Purchase of own ordinary shares
-
-
(38.6)
-
-
-
-
-
(38.6)
-
(38.6)
Share-based compensations:
• fair value of vesting rights
-
-
-
-
32.5
-
-
-
32.5
-
32.5
• stock options exercised (on newly
issued shares)
0.0
1.8
-
-
(0.7)
-
0.0
-
1.1
-
1.1
• performance shares issued
0.1
11.8
45.5
-
(28.5)
-
(28.9)
-
-
-
-
• taxes on share-based compensations
-
-
-
-
-
-
7.8
-
7.8
-
7.8
Total transactions with owners
0.1
13.6
6.9
-
3.3
-
208.0
(588.0)
(356.1)
-
(356.1)
Disposal of non-controlling interests
-
-
-
-
-
-
0.0
-
0.0
0.0
0.0
Dividend of non-controlling interests
-
-
-
-
-
-
-
-
0.0
0.0
0.0
Balance at December 31, 2017
25.9
2,284.3
(21.8)
39.6
57.5
(29.5)
1,263.6
631.4
4,251.0
0.7
4,251.7
Balance at January 1, 2016
25.8
2,270.5
(47.5)
205.1
50.4
(40.6)
879.2
518.8
3,861.7
0.0
3,861.7
Net income
-
-
-
-
-
-
-
588.0
588.0
0.2
588.2
Total other comprehensive income
-
-
-
16.5
-
(6.5)
-
-
10.0
0.0
10.0
Total comprehensive income
-
-
-
16.5
-
(6.5)
-
588.0
598.0
0.2
598.2
Transactions with owners:
Dividend 2015 on ordinary shares
-
-
-
-
-
-
199.0
(506.2)
(307.2)
-
(307.2)
Dividend 2015 on preference shares
-
-
-
-
-
-
-
(12.6)
(12.6)
-
(12.6)
Purchase of own ordinary shares
-
-
(35.8)
-
-
-
-
-
(35.8)
-
(35.8)
Share-based compensations:
• fair value of vesting rights
-
-
-
-
31.3
-
-
-
31.3
-
31.3
• stock options exercised (on newly
issued shares)
0.0
0.2
-
-
(0.1)
-
0.0
-
0.1
-
0.1
• performance shares issued
-
-
54.6
-
(27.4)
-
(27.2)
-
-
-
-
• taxes on share-based compensations
-
-
-
-
-
-
4.7
-
4.7
-
4.7
Total transactions with owners
0.0
0.2
18.8
-
3.8
-
176.5
(518.8)
(319.5)
-
(319.5)
Acquisition of non-controlling interests
-
-
-
-
-
-
-
-
-
0.6
0.6
Disposal of non-controlling interests
-
-
-
-
-
-
(0.1)
-
(0.1)
(0.1)
(0.2)
Balance at December 31, 2016
25.8
2,270.7
(28.7)
221.6
54.2
(47.1)
1,055.6
588.0
4,140.1
0.7
4,140.8
1 The total of the various items included under ’reserves’ within shareholders’ equity as at December 31, 2017 is € 1,309.4 million (December 31, 2016: € 1,255.6 million). Additional
information with respect to equity is given in note 19.
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financial statements
supplementary information
main notes to the
consolidated
financial statements.
1 general information
Randstad Holding nv is a public limited liability company
incorporated and domiciled in the Netherlands and
listed on Euronext Amsterdam. The registered office of
the company is in Amsterdam. The address of the
company is Diemermere 25, 1112 TC Diemen, The
Netherlands.
The consolidated financial statements of Randstad
Holding nv include the company and its subsidiaries
(together called the 'Group').
See note 22 for IFRS consolidation policies and an
overview of selected subsidiaries.
1.1 activities
Randstad specializes in solutions in the field of flexible
work and human resources services. Our services
comprise temporary staffing and permanent
placements. We also offer on-site workforce
management, as well as other HR services, such as
recruitment process outsourcing (RPO), managed
services programs (MSP), payroll services,
outplacement, and job posting and résumé services on
digital platforms.
1.2 date of authorization of issue
The financial statements were signed and authorized for
issue by the Executive Board and Supervisory Board on
February 12, 2018. The adoption of the financial
statements and the adoption of the dividend are
reserved for the shareholders in the Annual General
Meeting of Shareholders (AGM) on March 27, 2018.
2 summary of significant
accounting policies
The significant accounting policies applied in the
preparation of these consolidated financial statements
are set out separately below or explained in the
respective notes to these financial statements. These
policies have been consistently applied to the periods
presented.
2.1 basis of preparation
The consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards and IFRS IC interpretations (IFRIC),
as adopted by the European Union (hereinafter IFRS) and
in accordance with the legal requirements of Part 9,
Book 2 of the Dutch Civil Code.
In 2017, a number of amendments to existing IFRS
standards became effective. These new standards,
amendments, and interpretations, as far as they are
relevant to the Group, have no impact on the valuation
and classification of assets and liabilities of the Group,
nor on its income statement or cash flows.
In 2017 and before, various other new standards, as well
as amendments to and interpretations of existing IFRS
standards were published and/or enacted for
application in accounting periods beginning on or after
January 1, 2018. As far as these standards, amendments,
and interpretations are applicable to the Group, the
Group has decided not to opt for early adoption.
Of these new standards, amendments, and
interpretations, IFRS 9 'Financial instruments' and IFRS
15 'Revenue from contracts with customers' will not have
a material impact on the valuation and classification of
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the assets and liabilities of the Group, nor on its income
statement or cash flows. Randstad will apply the
standards IFRS 9 and IFRS 15 as from January 1, 2018
going forward.
Interpretation 'IFRIC 23, uncertainty over income tax
treatments' is expected to have no material impact on
our valuation of uncertainties regarding income taxes.
Randstad will apply IFRIC 23 as from January 1, 2019
going forward.
The new standard IFRS 16 'Leases', replacing 'IAS 17
Leases' and taking effect on January 1, 2019 will result in
the recognition of almost all our leases on the balance
sheet.
The current distinction between operating and
financing leases has been removed from IFRS 16. The
standard requires us to recognize a 'right of use' asset,
representing our right to use the underlying asset and a
liability, representing our obligation to make lease
payments, for almost all lease contracts. Short-term
leases and low-value leases are exempted. The Group
has preliminarily decided to make use of these
exemptions. The impact on the income statement is that
current operating expenses will be replaced by
depreciation and interest; as a result, key metrics such
as operating profit and EBIT(D)A will change. Total
expenses (depreciation for 'right of use' assets and
interest on lease liabilities) are higher in the earlier years
of a typical lease and lower in the later years, in
comparison with current accounting for operating
leases.
The main impact on the statement of cash flows is higher
cash flows from operating activities, since cash
payments for the principal part of the lease liability are
classified in the net cash flow from financing activities.
Randstad will apply IFRS 16 as of January 1, 2019 and
intends to apply the standard retrospectively to each
prior year, applying IAS 8 'Accounting Policies, Changes
in Accounting estimates and Errors'. Preliminary
calculations indicate that as of January 1, 2018, IFRS 16
will lead to the recognition of 'Right of use' assets and
other assets of € 560 million and of financial liabilities of
€ 610 million. The net impact on equity, taking into
account deferred taxes, is expected to amount to
€ 35 to € 40 million.
Unless otherwise stated, the financial statements are
prepared under the historical cost convention and on a
going concern basis.
For both current assets and liabilities (expected to be
recovered or settled within 1 year) and non-current
assets and liabilities (expected to be recovered or
settled after 1 year), the corresponding presentation is
used on the face of the balance sheet.
The Group operates in countries with different
currencies. All subsidiaries have as their functional
currency the local currency of the country in which they
operate. The Group and its parent company use the euro
as their functional and presentation currency.
All amounts in tables are presented in millions of euros,
unless explicitly stated otherwise.
2.2 fair value estimation
Fair value estimations are mainly used with respect to
financial assets and financial liabilities.
As no financial assets and liabilities of the Group are
traded in active markets, the fair value of financial assets
and liabilities is estimated by discounting the future
contractual cash flows at current market interest rates
that are available to the Group for similar financial assets
and liabilities. The fair value is only calculated for
disclosure purposes.
Because of this valuation method, which uses
observable market data for the interest rates, the
resulting fair value estimates reflect 'Level 2 Financial
Instruments' for 2018 and 2017.
3 capital and financial risk
management
3.1 capital management
Randstad Holding’s policy is to maintain a sound
financial position through a leverage ratio (net debt/
EBITDA) of between 0 and 2. We believe this is important
in order to maintain candidate, client, creditor, and
investor confidence, and to sustain the future
development of our business.
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Our financing policy aims to secure financing that
matches the Group's mid- to long-term financing
requirements.
3.1.1 dividend policy
In general, our target is to achieve a flexible payout ratio
of 40% to 50% of net profit, adjusted for amortization
and impairment of acquisition-related intangible assets
and goodwill, integration costs, and one-offs, provided
that our financial position allows for it.
We will implement a conditional cash floor dividend of
€ 1.62 per share (based on the average dividend per
share of 2014, 2015 and 2016). This baseline dividend
level will be maintained even when the general 40–50%
payout ratio is temporarily exceeded, barring (i)
seriously adverse economic conditions, (ii) material
strategic changes to the sector, and (iii) a material
deterioration in solvency and liquidity ratios. We will also
implement optional additional cash returns in the event
of a leverage ratio below 1.0 through (i) a special
dividend (preferred) or (ii) share buybacks.
3.2 financial risk management
The Group is exposed to a variety of financial risks,
including credit risk, liquidity risk, foreign currency
exchange risk, and interest rate risk. One of the
objectives of the Group’s Risk & Control framework is to
minimize potential adverse effects on the financial
performance of the Group.
Our Risk & Control framework is in place to ensure that
risks are detected, measured, and reported properly.
Risk management procedures are carried out under
policies that have been approved by the Executive
Board.
3.2.1 credit risk
Credit risk within the Group arises from the possibility
that clients and other counterparties may not be able to
settle their obligations towards the Group.
Credit control policies are included in a blueprint, which
is a global document including prescribed work
procedures and guidelines; to manage credit risk, credit
checks are performed upfront for new customers. For
high-risk clients, credit limits are put in place based on
internal and/or external ratings. Credit risk is monitored
by the credit control departments of our operating
companies on a daily basis.
The Group has no significant concentrations of credit
risk, as the Group has many clients in a large number of
industries and countries.
trade and other receivables
2017
2016
Trade receivables
4,015.1
3,593.3
Less: provision for impairment
49.8
59.2
Trade receivables, net of provision for
impairment
3,965.3
3,534.1
Other receivables
487.3
456.0
Prepayments
125.1
114.2
CICE receivable
98.7
67.4
Held-to-maturity investments
3.6
2.5
4,680.0
4,174.2
The carrying amount of these receivables reflects the
fair value.
The Group does not hold any collateral as security.
accounting policy
Trade and other receivables are initially stated at fair
value. Subsequent measurement is at amortized cost
using the effective interest method less provision for
impairment.
A provision for impairment of trade and other
receivables is established when it is expected that the
Group will not be able to collect the amounts receivable.
The provision for impairment of trade receivables is
based on the trade receivable portfolio experience of
subsidiaries, as well as on individual assessments of
expected non-recoverable receivables. Significant
financial difficulties of the debtor, the probability that
the debtor will enter into bankruptcy or financial
reorganization, serious default or delinquency in
payments, and significant overdues in payment are
considered indicators that the trade receivable is
impaired and/or a credit loss is expected to occur. The
amount of the provision is equal to the difference
between the carrying amount of the asset and the
present value of estimated future cash flows.
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movements in the provision for impairment of trade
receivables
2017
2016
Balance at January 1
59.2
38.4
Acquisition of subsidiaries
3.9
28.8
Charged to selling expenses
12.9
7.7
Receivables written off as uncollectable
(25.0)
(15.6)
Translation differences
(1.2)
(0.1)
Balance at December 31
49.8
59.2
In the provision for impairment of trade receivables, an
amount of € 32.7 million (2016: € 43.4 million) is
included for individually impaired receivables. The
remainder is related to other expected credit losses.
The provision for impaired trade receivables is
excluding recoverable value-added taxes.
Amounts charged to the provision for impairment of
trade receivables are generally written off when there is
no expectation of recovering additional cash.
aging of trade receivables, based on invoice date
2017
2016
amount
%
amount
%
0-4 weeks
2,306.8
57.5
2,071.8
57.7
5-16 weeks
1,594.7
39.7
1,409.3
39.2
17-26 weeks
58.7
1.4
51.0
1.4
Not impaired
3,960.2
98.6
3,532.1
98.3
Impaired
54.9
1.4
61.2
1.7
4,015.1
100.0
3,593.3
100.0
The information with regard to aging categories is based
on invoice date, as the risk of non-payment starts from
this date.
Trade receivables that are neither past due nor impaired
amount to € 3,322 million (2016: € 2,990 million); an
amount of € 638 million (2016: € 542 million) is past due,
but not impaired.
Excess cash positions are invested with preferred
financial partners, which are mostly considered to be
high-quality financial institutions with sound credit
ratings, or in highly rated liquidity funds. Policies are in
place that limit the amount of credit exposure to any one
financial institution.
For other financial assets, which mainly comprise
receivables on governmental or semi-governmental
bodies, see note 16.
3.2.2 liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations. The Group’s approach to
liquidity risk is to ensure, as far as possible, that it will
always have sufficient funds available to meet its
liabilities when due, under both normal and stressed
conditions. This risk is managed by having sufficient
availability of cash, as well as committed and
uncommitted credit lines, both at Group and subsidiary
level.
credit facilities
As at December 31, 2017, the Group has a € 1,850 million
(2016: € 1,920 million) committed multi-currency
syndicated revolving credit facility at its disposal, which
matures in July 2022 (2016: July 2021). In 2017, the Group
renewed its multi-currency syndicated revolving credit
facility. The facility agreement contains a covenant with
respect to the net debt to EBITDA ratio (leverage ratio),
as well as a paragraph on material adverse changes; the
net debt to EBITDA ratio has a limit of 3.5, and is
calculated based on the results of the Group on a 12-
month basis. In certain cases, Randstad is allowed to
report a leverage ratio of 4.25x EBITDA for a limited
period of time.
The Group recently issued a privately placed German
promissory note ('Schuldschein'), and successfully
raised € 150 million, with a maximum three-year tenor.
This promissory note ultimately matures in December
2020, and bears an interest that is based on 6-month
Euribor (with a floor of zero) increased by a fixed margin
of 0.45% per annum, payable in June and December of
each year. Covenants are fully aligned with the
committed multi-currency syndicated revolving credit
facility.
Based upon these financial statements, the actual
leverage ratio as at December 31, 2017 is 0.9, which is
well below the limit.
The facility agreement stipulates that the calculation of
this ratio is based on the accounting policies as included
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in the annual report 2011, being the initial starting date
of the current facility.
The credit facility has an interest rate that is based each
time on the term of the drawings, increased by a margin
above the applicable Euribor or LIBOR rates. The margin
is variable and depends on the 'net debt to EBITDA' ratio.
The interest rates at year-end are 2.12% for drawings in
US dollars, 1.05% for drawings in UK pounds sterling,
and 0.55% for drawings in Japanese yens, for a term
shorter than one month. These are also considered to be
the effective interest rates.
borrowings
Borrowings are initially recognized at fair value less
attributable transaction costs. Subsequent to initial
recognition, borrowings are stated at amortized cost.
Any difference between the proceeds and the amount
to be repaid is recognized in net finance costs during
the term of the borrowings, using the effective interest
method.
total borrowings
2017
2016
Non-current borrowings
639.5
699.2
Non-current borrowings
639.5
699.2
Current borrowings
712.5
438.6
Short-term part of non-current
borrowings
-
41.4
Borrowings
712.5
480.0
Total borrowings
1,352.0
1,179.2
Transaction costs included in the drawings on the multi-
currency syndicated revolving credit facility amount
to € 4.3 million (2016: € 5.4 million).
The existing drawings on the multi-currency syndicated
revolving credit facility are denominated in US dollars
(€ 417.5 million), UK pounds sterling (€ 49.6 million), and
Japanese yens (€ 26.7 million). All amounts
denominated in currencies other than the euro are
designated as hedges of the net investment in
subsidiaries in the US (for USD), the UK (for UK pounds),
and Japan (for YEN). These net-investment hedges are
all considered effective.
Current borrowings are denominated in various
currencies. As at December 31, 2017, the major amounts
denominated in foreign currencies are for an amount of
€ 8.0 million in US dollars, € 4.4 million in Argentine
pesos and € 10.7 million in Indian rupees.
As at December 31, 2016, the short-term part of non-
current borrowings to the amount of € 41.4 million
(43.7 million US dollars) represented the remaining part
of the long-term debt relating to the acquisition of
Monster, which was repaid at the beginning of January
2017.
Since the interest rates on the current borrowings
fluctuate with the market, the effective interest rates are
considered equal to the actual rates.
Negative pledges have been issued for purposes of bank
overdraft facilities, and 'pari passu' clauses apply.
At year-ends 2017 and 2016, the Group had no
outstanding interest rate or currency derivatives.
movements in non-current borrowings
2017
2016
Balance at January 1
740.6
124.6
(Repayments of) / Drawings on
syndicated loan
(145.2)
552.9
Acquisition of subsidiaries
106.5
128.3
Repayments of other non-current
borrowings
(147.9)
(87.4)
Issuance of promissory note
150.0
-
Amortization of transaction costs
1.6
2.2
Changes in value of other long-term
debt
-
(3.9)
Translation differences
(66.1)
23.9
Non-current borrowings before
reclassification
639.5
740.6
Reclassification to short-term part of
non-current borrowings
-
(41.4)
Balance at December 31
639.5
699.2
The balance of non-current borrowings at December 31,
2017 consists of drawings on the syndicated loan
(€ 489.5 million) and the promissory note (€ 150.0
million).
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movements in current borrowings
2017
2016
Balance at January 1
438.6
182.1
Acquisition of subsidiaries
0.3
62.7
Net increase
280.6
202.0
Translation and currency differences
(7.0)
(8.2)
Balance at December 31
712.5
438.6
Movements in current borrowings exclude the short-
term part of non-current borrowings.
Maturities of financial liabilities are expected to be:
expected maturities of financial liabilities
including interest payments
carrying amount
0 - 90 days
91 - 365 days
2 - 5 years
more than 5 years
December 31, 2017
Non-current borrowings1
639.5
494.6
150.7
-
-
Current borrowings2
712.5
712.5
-
-
-
Trade and other payables3
3,596.7
3,073.3
523.4
-
-
Other liabilities4
33.0
1.0
21.2
12.9
-
4,981.7
4,281.4
695.3
12.9
-
December 31, 2016
Non-current borrowings1
699.2
705.2
-
-
-
Current borrowings2
480.0
480.0
-
-
-
Trade and other payables3
3,279.4
2,788.9
490.5
-
-
Other liabilities4
19.3
1.0
0.8
2.9
18.6
4,477.9
3,975.1
491.3
2.9
18.6
1 Drawings on the syndicated loan contractually mature in January of the subsequent year (see note 21.2); to be extended by new drawings. All amounts are undiscounted.
2 No interest is included, since current borrowings are considered repayable upon demand. All amounts are undiscounted and include short-term part of long-term debt.
3 Excluding deferred income. All amounts are undiscounted.
4 Other liabilities based upon the estimated maturities, due to the nature of put options. Carrying amount is discounted, whereas other amounts are undiscounted.
cash and cash equivalents
Cash and cash equivalents comprise cash on hand and
at bank, as well as time deposits and other short-term
highly liquid investments with original maturities of
three months or less.
cash and cash equivalents
2017
2016
Time deposits
10.8
19.3
Cash on hand and at bank
315.5
366.5
326.3
385.8
Time deposits fall due, on average, within a month. The
average interest rate for time deposits is 4.9% (2016:
1.4%).
An amount of € 320.6 million out of € 326.3 million
(2016: € 381.3 million out of € 385.8 million) is available
upon demand.
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main notes to the consolidated financial statements.
net debt
The net debt includes the balance of cash, cash
equivalents, and borrowings (both current and non-
current).
net debt
2017
2016
Non-current borrowings
(639.5)
(699.2)
Current borrowings
(712.5)
(438.6)
Short-term part of non-current
borrowings
-
(41.4)
Total borrowings
(1,352.0)
(1,179.2)
Cash and cash equivalents
326.3
385.8
Net debt
(1,025.7)
(793.4)
3.2.3 foreign currency exchange risk
transactions and balances in currencies other than the
functional currency
Transactions in currencies other than the functional
currency of the related subsidiary are converted at the
foreign exchange rate on the date of the transaction.
Monetary balance sheet items (such as cash and
borrowings) in currencies other than the functional
currency of the related subsidiary are converted at year-
end exchange rates.
Exchange differences resulting from the settlement of
transactions on cash, cash equivalents, and borrowings,
as well as from the conversion of these monetary
balance sheet items, are included in net finance costs.
Exchange differences resulting from the settlement of
other transactions and conversion of other monetary
balance sheet items are included in operating expenses.
Non-monetary balance sheet items (such as property,
plant and equipment) that are measured in terms of
historical cost in currencies other than the functional
currency of the related company are converted at the
foreign exchange rates on the date of transaction.
exposures to foreign currency exchange risk
The Group uses the euro as its reporting currency.
Currencies other than the euro that are of primary
importance to the Group are the Australian dollar, the
Canadian dollar, the Japanese yen, the UK pound
sterling and the US dollar.
main exchange rates to the euro
averages on annual basis
2017
2016
average
at year-end
average
at year-end
Australian dollar
0.68
0.65
0.67
0.68
Canadian dollar
0.68
0.67
0.68
0.70
Japanese yen
0.00790
0.00742
0.00832
0.00812
UK pound sterling
1.14
1.13
1.22
1.17
US dollar
0.89
0.83
0.90
0.95
The foreign currency exchange risk of the Group with
respect to transactions is limited, because subsidiaries
usually generate both revenues and expenses in the
same local currency.
All other foreign exchange transactions, which mostly
consist of intercompany financing (equity increases,
dividends, intercompany loans, and interests), are
executed, in principle, on a spot basis. The Group has a
policy to match, within certain preset boundaries, the
currencies in the net debt positions with the currencies
in the cash flow generation. The currency mix of the debt
can easily be adjusted, as the € 1,850 million syndicated
revolving credit facility is a multi-currency facility. In
principle, the use of derivatives is therefore
unnecessary.
Currency fluctuations can, however, affect the
consolidated results, due to the translation of local
results into the Group's reporting currency.
Translation effects from consolidation may also impact
shareholders' equity. The Group has a number of net
investments in foreign subsidiaries whose assets and
liabilities are exposed to currency translation risk that is
accounted for, through total other comprehensive
income, in equity. Currency exposures arising from the
net assets of the Group's foreign operations are
monitored and, when considered necessary, hedged
against borrowings in the relevant currencies through a
net investment hedge; translation differences on
borrowings classified as such are included, through
comprehensive income, in equity.
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sensitivity
If the euro had weakened or strengthened 10% on
average during 2017 against the currencies mentioned
above, with all other variables held constant, EBITA for
the year 2017 would have been higher or lower
respectively in the range of € 2 million − € 19 million per
currency. The effect on shareholders’ equity would have
been the same (before tax effects) (2016: range of
€ 2 million − € 24 million per currency).
3.2.4 interest rate risk
The general policy is to keep interest rates on net debt
floating as much as possible. We believe this adds value
for shareholders in the long term, as over time floating
interest rates are on average significantly lower than
fixed interest rates. We also believe that the staffing
industry has a natural hedge to interest rate changes
(EBITDA levels usually move up and down more or less
in line with interest rate levels), and since the Group is
cash-generating, we aim to maintain floating interest
rates on net debt as much as possible.
sensitivity
If the interest rate had been 1 percentage point higher
on average during 2017, with all other variables held
constant, net interest expenses for the year would have
been € 13 million higher (2016: € 5 million higher).
4 critical accounting
policies, judgments,
estimates,
and assumptions
In preparing the financial statements, management has
to make certain judgments, estimates, and assumptions
that affect the application of accounting policies and the
reported amounts of assets, liabilities, revenue, and
expenses. The actual outcome may differ from these
judgments, estimates, and assumptions, and therefore
could have a material effect on the carrying amount of
the asset or liability involved. The timing of outflow of
resources to settle provisions is subject to the same
uncertain factors. Judgments, estimates, and
assumptions are reviewed on an ongoing basis, and are
based on historical experience and various other
factors, including expectations about future events that
are believed to be reasonable under the circumstances
and for the item involved. Revisions to accounting
estimates are recognized in the period in which the
estimates are revised and in any future periods affected.
The Group considers the following accounting policies,
judgments, estimates, and assumptions as critical:
• Impairment of non-financial assets in general and
impairment of goodwill specifically;
• Provisions;
• Corporate taxes;
• Revenue recognition.
4.1 impairments
4.1.1 impairment of non-financial assets
The carrying amounts of the Group’s non-financial
assets, with the exception of deferred tax assets and the
plan assets in relation to defined benefit pension plans,
are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable. For goodwill, testing
for impairment is performed at least annually.
If there are such indications, the recoverable amount of
the asset is estimated. If this is not possible, the
recoverable amount of the cash-generating unit to
which the asset belongs is estimated. For purposes of
impairment testing, assets are grouped at the lowest
levels for which there are separately identifiable cash
flows (cash-generating units). Goodwill is allocated to
groups of cash-generating units, being operating
segments, for purposes of impairment testing.
If the recoverable amount of an asset or a cash-
generating unit (or operating segment) is estimated to
be lower than its carrying amount, the related carrying
amount is reduced to its recoverable amount.
The resulting impairment loss is immediately recognized
in total operating expenses.
The recoverable amount is the higher of an asset's fair
value less costs to dispose and its value in use.
The value in use is determined by using the present
value of estimated cash flow projections. The discount
rates are based on interest rates that align with the terms
of the projections and the specific risks of the asset or
business respectively.
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In determining the fair value less costs to dispose,
information such as recent market transactions is taken
into account; if no such transactions (or comparable
transactions) can be identified, an appropriate valuation
model is used. This valuation model is supplemented by
valuation multiples, quoted share prices, or other
available fair-value indicators.
Impairment losses relating to a cash-generating unit (or
operating segment) are first allocated to reduce the
carrying amount of the goodwill of the related cash-
generating unit (or operating segment) and then to
reduce the carrying amount of the other assets of that
cash-generating unit (or operating segment) on a pro
rata basis.
An impairment loss with respect to goodwill is not
reversed.
With respect to other assets, an impairment loss
recognized in a prior period is assessed at each
reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates
used to determine the recoverable amount.
For the impairment testing method of property, plant
and equipment, software, and acquisition-related
intangible assets, see notes 13, 14 and 15 respectively.
4.1.2 goodwill and impairment of goodwill
goodwill
2017
2016
Cost
3,750.2
3,334.8
Accumulated impairment
817.1
840.0
Balance at January 1
2,933.1
2,494.8
Acquisition of subsidiaries
256.3
441.2
Disposal of subsidiaries
-
(0.1)
Impairment
-
(9.9)
Translation differences
(112.1)
7.1
Balance at December 31
3,077.3
2,933.1
Cost
3,861.2
3,750.2
Accumulated impairment
783.9
817.1
Balance at December 31
3,077.3
2,933.1
In 2017, the Group finalized the purchase price
allocation of acquisitions made in 2016, being
O(biettivo) L(avoro) Group Srl, Careo Holding KK, twago,
and Monster Worldwide Inc. This resulted in a downward
adjustment to goodwill of € 4.9 million, which is
included in the amount of goodwill of € 256.3 million in
respect of the acquisition of subsidiaries. The
adjustments in the finalization of purchase price
allocations mainly arose from changes in estimates of
contingent liabilities identified.
For all acquisitions during 2017, except for the
acquisition of eSolve AG, the purchase price allocation
was finalized before December 31, 2017. These
finalizations resulted in a downward adjustment to
(provisional) goodwill, calculated at the moment of
acquisition, to the amount of € 4.2 million. The
adjustments were mainly the result of changes in the
consideration and further alignment with the Group's
accounting policies.
The amounts involved are neither considered material in
relation to the consideration of the acquired companies
nor to the total goodwill in respect of these acquisitions.
In 2016, the Group finalized the purchase price
allocation relating to the acquisition of RiseSmart Inc.
(USA) in 2015 and of Proffice AB in 2016. This resulted in
a minor adjustment to goodwill of RiseSmart of
€ 0.2 million, which is included in the amount of
€ 441.2 million in respect of the acquisition of
subsidiaries. The amount involved is neither considered
material in relation to the total consideration for
RiseSmart Inc. (USA) nor to the total goodwill for
RiseSmart Inc. (USA).
In 2016, the Group disposed of its subsidiary Randstad
Lanka (Private) Limited (Sri Lanka). The related carrying
amount of goodwill amounting to € 0.1 million has been
derecognized.
accounting policies
Goodwill on acquisitions of subsidiaries is included in
intangible assets; goodwill on acquisitions of associates
is included in investments in associates. For the
measurement of goodwill at initial recognition, see note
6.1.
Goodwill on acquisitions represents payments made by
the Group in anticipation of future economic benefits
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from assets that cannot be identified individually and
cannot be recognized separately. These relate, for
example, to synergies expected from integrating the
acquired companies and the workforces of the acquired
companies.
Goodwill is stated at cost less accumulated impairment
losses. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the
entity that is sold. Where goodwill has been allocated to
an operating segment and part of the operation within
that operating segment is disposed of, the goodwill
related to that part is included in the carrying amount of
the disposed operation when determining the gain or
loss on disposal. Goodwill disposed is calculated based
on the relative value of the disposed operation of the
total value of the operating segment to which the
disposed operation belongs. If disposal of an entity
results in a loss, the goodwill part in the loss is presented
in the statement of comprehensive income as an
impairment of goodwill, up to a maximum amount of the
loss on disposal.
Goodwill is allocated to operating segments for the
purpose of impairment testing. The allocation is made
to those operating segments that are expected to
benefit from the business combination in which the
goodwill arose.
impairment testing
In the case of triggering events and at least annually, the
Group tests whether intangible assets, being goodwill
and acquisition-related intangible assets, have suffered
any impairment. The recoverable amounts of cash-
generating units have been determined using, among
other instruments, value-in-use calculations. These
calculations require the use of estimates. Based on these
impairment tests, impairment losses, if any, are
identified.
determination of recoverable amount
The recoverable amount for all operating segments is
based on the higher of the value in use and the fair value
less cost to dispose. The value in use is determined by
means of cash flow projections based on the actual
operating results adjusted for non-cash items (mainly
depreciation and amortization) and the expected future
performance, which in turn is based on historical
performance, management's estimates and
assumptions of revenue growth, and on developments
of operating margins, assessed using external data,
covering a period of, in principle, nine years (2016: nine
years). Cash flow projections after this period are
extrapolated by means of a growth percentage of 0.25%
(2016: 0.25%) throughout the Group. The nine-year
period of the projections reflects an estimated full
business cycle of the industry.
annual impairment test
Key assumptions in the cash flow projections are:
• Annual revenue growth of the Group: on average
between 1.7% and 6.4% for the first three years and
1.7% to 1.9% for the following six years (Netherlands:
0.9% to 3.7% and 0.9% to 1.0% respectively; USA:
2.4% to 5.4% and 2.4% to 2.5% respectively; France:
0.3% to 9.0% and 0.3% to 0.4% respectively);
• EBITA of the Group in the range of 4.7% to 5.1% of
revenue (Netherlands: 4.8% to 5.6%; USA: 5.7% to
6.5%; France: 4.1% to 5.2%);
• Growth rate in revenue and EBITA percentages vary
between segments in relatively limited terms and are
dependent on the mix in revenue.
The cash flow projections are prepared in local
currencies, and discounted with pre-tax discount rates
for each currency involved. The pre-tax discount rates
vary from 8.4% to 20.2% (2016: 8.3% to 20.8%). The
weighted average is 12.3% (2016: average 12.6%).
Netherlands: 10.0% (2016: 10.7%); USA: 14.0% (2016:
14.0%; France: 15.0% (2016: 16.2%)).
results of annual impairment test
The annual impairment tests carried out by the Group
for 2017 resulted in no impairments (2016: India € 9.9
million).
sensitivity relating to annual impairment test
The outcome of impairment testing is sensitive to
variations in estimates and assumptions. Variations in
estimates and assumptions have the following effect on
the recoverable amount calculations:
• Revenue growth: a 1.0%-point lower growth rate would
not result in an impairment charge;
• A 1.0%-point lower EBITA in percentage of revenue
would result in an impairment charge of € 55 million
for the operating segment UK; a 1.5%-point lower EBITA
in percentage of revenue would imply a € 201 million
impairment charge for the operating segments UK
(€ 100 million), Australia (€ 9 million), France
(€ 80 million), Monster (€ 8 million), and Sourceright
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EMEA (€ 4 million) (2016: € 18 million; UK € 13 million
and Australia € 5 million);
• Discount rate: a 1.0%-point higher discount rate would
not result in an impairment charge.
For the carrying amount of goodwill by reporting
segment, see note 5.2.
In 2017, the operating segments UK, Australia, France,
Monster, and Sourceright EMEA are most sensitive to
variations in assumptions (2016: UK and Australia). The
recoverable amount of these operating segments of
€ 2,602 million exceeds the carrying amount (including
€ 810 million of goodwill) by € 737 million.
The operating segments the Netherlands, Belgium &
Luxembourg, Germany, USA, Canada, Italy, Spain,
Portugal, Switzerland, Eastern Europe, Scandinavia,
Poland, Japan, China, Sourceright North America, Hong
Kong, Singapore, Malaysia, Sourceright APAC, and Latin
America have substantial headroom available.
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4.2 provisions and employee benefit
obligations
4.2.1 provisions
movements in provisions
restructuring
workers' compensation
other
total
Balance at January 1, 2017
25.6
47.0
71.4
144.0
Movements in 2017
Acquisition of subsidiaries
0.1
-
19.8
19.9
Charged to income statement
50.3
23.2
27.8
101.3
Released to income statement
(2.8)
-
(15.4)
(18.2)
Withdrawals
(40.7)
(29.4)
(25.0)
(95.1)
Total amount in statement of cash flows
6.8
(6.2)
(12.6)
(12.0)
Interest due to passage of time
0.2
1.5
0.2
1.9
Translation differences
(1.3)
(5.2)
(3.7)
(10.2)
Balance at December 31, 2017
31.4
37.1
75.1
143.6
Non-current
4.2
22.7
44.5
71.4
Current
27.2
14.4
30.6
72.2
Balance at December 31, 2017
31.4
37.1
75.1
143.6
Balance at January 1, 2016
Non-current
4.4
31.0
36.2
71.6
Current
18.4
17.3
19.7
55.4
22.8
48.3
55.9
127.0
Movements in 2016
Acquisition of subsidiaries
7.8
-
13.2
21.0
Charged to income statement
17.7
23.6
12.8
54.1
Released to income statement
(3.2)
-
(2.7)
(5.9)
Withdrawals
(19.7)
(27.5)
(8.9)
(56.1)
Total amount in statement of cash flows
(5.2)
(3.9)
1.2
(7.9)
Interest due to passage of time
0.1
1.2
0.2
1.5
Translation differences
0.1
1.4
0.9
2.4
Balance at December 31, 2016
25.6
47.0
71.4
144.0
Non-current
7.4
30.2
37.7
75.3
Current
18.2
16.8
33.7
68.7
Balance at December 31, 2016
25.6
47.0
71.4
144.0
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Provisions for restructuring are recognized when a
detailed and formal restructuring plan is approved, and
the restructuring has either commenced or has been
announced publicly. These restructuring provisions
mainly comprise severance payments for personnel and
lease termination penalties for branches.
Provisions for workers' compensation are based on
claims for compensation and medical expenses (of both
candidates and employees) in relation to accidents
during working hours, for which the Group is liable
under applicable local laws. These provisions relate to
our activities in North America and in part of Australia,
where we are responsible for payment of workers'
compensation claims up to a maximum amount per
claim, beyond which the costs are insured. Independent
actuaries calculate the amount of the provision.
The effective interest rate used in the calculation of the
provision for workers' compensation is 3% (2016: 3%).
Other provisions mainly relate to:
• Onerous contracts, where the expected benefits to be
derived by the Group from a contract are lower than
the unavoidable cost of meeting its obligations under
the contract; and
• Claims from third parties. In the ordinary course of
business, the company is involved in various legal
proceedings, in which claims are asserted by clients,
candidates and vendors, and involved in investigations
by local tax and regulatory authorities that have led or
might lead to claims. These claims are provided for at
the lowest amount at which the Group expects the
claim to be reasonably settled. Due to the highly
uncertain timing of the expected future cash outflow,
amounts provided for claims from third parties are
categorized to be settled within one year of the
balance sheet date, unless these are explicitly
expected to be settled later.
The majority of the non-current part of these provisions
is expected to be settled within three years of the
balance sheet date.
sensitivity
The provision for workers' compensation is sensitive to
interest rate changes. Should the interest rate deviate
by 1 percentage point, with all other variables held
constant, the provision would deviate in the range of
€ 1 million to € 2 million (2016: range of € 1 million to
€ 2 million).
accounting policy
Provisions are recognized for legally enforceable or
constructive obligations as a result of a past event for
which the settlement is likely to require an outflow of
resources and to the extent these can be reliably
estimated. If the effect is material, provisions are
determined by discounting the expected future cash
flows at an interest rate that reflects the current market
assessments of the time value of money and, where
appropriate, the risks specific to the obligation.
4.2.2 employee benefit obligations
Employee benefit obligations comprise obligations from
defined benefit pension plans, other post-employment
benefits, and other long-term employee benefits.
employee benefit obligations
2017
2016
Defined benefit pension plans
91.5
77.8
Other post-employment benefits
9.7
4.2
Other long-term employee benefits
31.1
25.3
Balance at January 1
132.3
107.3
Movements during the year
Acquisition of subsidiaries
2.9
5.8
Charged to comprehensive income
34.6
77.3
Withdrawals/benefits paid
(27.5)
(47.0)
Contributions, employers
(12.3)
(11.7)
Translation differences
(2.0)
0.6
Total movements
(4.3)
25.0
Defined benefit pension plans
69.5
91.5
Other post-employment benefits
9.0
9.7
Other long-term employee benefits
49.5
31.1
Balance at December 31
128.0
132.3
Non-current
114.7
119.1
Current
13.3
13.2
Balance at December 31
128.0
132.3
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employee benefit obligations charged to comprehensive
income
2017
2016
Current service cost, total
68.1
73.9
Contributions, employees
(8.6)
(7.5)
Current service cost net, charged to
operating profit
59.5
66.4
Interest expense due to passage of time
5.0
3.3
Interest income due to passage of time
(3.6)
(1.5)
Charged to net finance costs
1.4
1.8
Remeasurement losses, net
(26.3)
9.1
Charged to comprehensive income
34.6
77.3
For more information on employee benefit obligations,
see note 25.
4.3 corporate taxes
The Group is subject to corporate income taxes in
numerous jurisdictions. Significant judgment is required
in determining the worldwide deferred tax asset on,
among other items, tax losses carried forward. There are
many uncertain factors that affect the amount of tax
losses carried forward. The Group recognizes deferred
tax assets on tax losses carried forward based on its best
estimates. The recoverability of deferred income tax
assets is reviewed and assessed frequently, using
forecasts that are based on the actual operating results
and expected future performance. External data are
used for reference if considered necessary. When the
actual results are different from the amounts that were
initially estimated, such differences will impact the
income tax in the income statement (effective tax rate),
as well as the deferred tax assets and/or deferred tax
liabilities in the period in which these deviations occur.
The Group has also identified a number of uncertain tax
positions, which could lead to positive and/or negative
differences.
4.3.1 deferred and current income taxes
Using the balance sheet liability method, deferred tax
assets and liabilities are recognized to provide for
temporary differences between the value of the assets
and liabilities for financial reporting purposes and for tax
purposes. Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset current
tax assets against current tax liabilities, and when the
deferred income taxes relate to the same tax
jurisdiction.
Deferred tax assets, including those resulting from tax
losses carried forward, are recognized to the extent that
it is probable that future taxable profits will be available
against which the temporary differences, including tax
losses carried forward, can be utilized.
Deferred tax assets and liabilities are valued at tax rates
enacted or substantially enacted at year-end and which
are expected to apply in the coming years when the
assets and liabilities are expected to be realized or
settled.
Deferred tax is provided on temporary differences
arising on investments in subsidiaries and associates,
except for deferred income tax liabilities arising from
undistributed profits from investments where the entity
is able to control the timing of the reversal of the
difference and it is probable that the reversal will not
occur in the foreseeable future.
movements in total position of corporate taxes
2017
2016
Assets/(liabilities)
Deferred income tax assets
520.2
531.5
Current income tax receivables
72.2
58.0
Deferred income tax liabilities
(42.2)
(35.9)
Current income tax liabilities
(70.6)
(36.8)
Balance at January 1
479.6
516.8
Movements during the year
Charged to income statement
(207.0)
(197.8)
Net payments
186.2
159.8
Acquisition of subsidiaries' deferred taxes
(44.4)
(8.3)
Acquisition of subsidiaries' current taxes
1.7
(13.5)
Recognized in other comprehensive income
(23.7)
9.3
Recognized in equity on share-based
compensations
7.8
4.7
Translation differences
(43.4)
8.6
Total movements
(122.8)
(37.2)
Assets/(liabilities)
Deferred income tax assets
437.9
520.2
Current income tax receivables
79.2
72.2
Deferred income tax liabilities
(44.1)
(42.2)
Current income tax liabilities
(116.2)
(70.6)
Balance at December 31
356.8
479.6
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deferred income tax assets
Deferred income tax assets in relation to tax losses
carried forward comprise an amount of € 105 million
(2016: € 64 million), originating from subsidiaries that
showed tax losses in the current or preceding year.
Certain deferred income tax assets, whose
recoverability is considered not probable, are valued at
nil. These concern deferred tax assets in relation to tax
losses carried forward of € 322 million (2016: € 334
million), as well as deferred tax assets relating to other
temporary differences of € 1 million (2016: € 2 million).
The part of deferred tax assets that is expected to be
recovered within one year is estimated at € 51 million
(2016: € 90 million).
composition of deferred income tax assets
2017
2016
Tax losses carry-forward
328.2
347.7
Unused tax credits
114.5
112.4
Temporary differences:
Property, plant, equipment, and intangible
assets
57.3
59.0
Other receivables/other payables
75.6
91.3
Provisions
54.5
79.4
Deferred income tax assets (before netting)
630.1
689.8
Amount netted with deferred income tax
liabilities
(192.2)
(169.6)
Deferred income tax assets (after netting)
437.9
520.2
sensitivity
Deferred tax assets are only recognized to the extent
that it is considered probable that future taxable profits
will be available against which these deferred tax assets
can be utilized. The scenarios used are in agreement
with the estimates and assumptions used in the goodwill
impairment testing (see note 4.1.2). The various
scenarios yield potential outcomes that do not
materially deviate from the carrying amount.
Unused tax credits mainly relate to tax credits in the
USA, which will be realized after all tax losses carried
forward have been recovered.
deferred income tax liabilities
The part of deferred income tax liabilities that is
expected to be settled within one year is estimated at
€ 17 million (2016: € 5 million).
composition of deferred income tax liabilities
2017
2016
Acquisition-related intangible assets
60.2
28.3
Temporary differences subsidiaries
85.6
71.0
Other temporary differences
90.5
112.5
Deferred income tax liabilities (before netting)
236.3
211.8
Amount netted with deferred income tax assets
(192.2)
(169.6)
Deferred income tax liabilities (after netting)
44.1
42.2
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movements in deferred income taxes
In the table below, the balances of deferred income tax
assets and deferred income tax liabilities have been
included gross at the beginning and end of the year. The
netting of deferred income tax assets and liabilities is
shown in the tables for deferred income tax assets and
liabilities.
movements in deferred income taxes
Tax losses carry-
forward
Unused tax credits
Temporary differences
total 2017
total 2016
Deferred income tax assets
347.7
112.4
229.7
689.8
747.9
Deferred income tax liabilities
-
-
(211.8)
(211.8)
(252.3)
Balance at January 1
347.7
112.4
17.9
478.0
495.6
Movements during the year
Acquisition of subsidiaries
0.8
-
(45.2)
(44.4)
(8.3)
Income statement
(1.3)
16.3
(4.9)
10.1
29.7
Other movements
1.2
-
(9.7)
(8.5)
(49.6)
Translation differences
(20.2)
(14.2)
(7.0)
(41.4)
10.6
Total movements
(19.5)
2.1
(66.8)
(84.2)
(17.6)
Deferred income tax assets
328.2
114.5
187.4
630.1
689.8
Deferred income tax liabilities
-
-
(236.3)
(236.3)
(211.8)
Balance at December 31
328.2
114.5
(48.9)
393.8
478.0
4.3.2 corporate taxes on income
Corporate taxes on income for the year comprise
current taxes and deferred taxes. Income taxes are
recognized in the income statement, except for taxes
that relate to items recognized in other comprehensive
income; these taxes are then also directly recognized in
other comprehensive income.
Current taxes on income are the sum of taxes levied on
the results before taxes, in the countries where those
results were generated, based on local tax regulations
and at tax rates of the applicable year. Tax-exempt
income and expenses not deductible for tax purposes
are taken into account in calculating current taxes on
income.
details of corporate taxes on income
2017
2016
Current tax expense
217.1
227.5
Deferred tax (income) / expense
(10.1)
(29.7)
Tax expense
207.0
197.8
In 2017, the average effective tax rate on income before
taxes was 24.7% (2016: 25.1%). The reconciliation
between the applicable income tax rate of the
company's country of domicile and the average
effective tax rate is as follows:
reconciliation from applicable to effective tax rate
2017
2016
Income tax rate of the company's country of
domicile
25.0%
25.0%
Effect of income tax rates in other (non-
domestic) jurisdictions
0.1%
1.6%
Weighted average applicable tax rate
25.1%
26.6%
Tax-exempt income/non-tax-deductible items
(5.8%)
(5.7%)
Changes in statutory applicable tax rates and
effects of prior years
10.1%
1.3%
Change in valuation of deferred tax assets and
other
(4.7%)
2.9%
Average effective tax rate
24.7%
25.1%
The change in the weighted average applicable tax rate
in 2017 compared to 2016 is due to a changed relative
mix in the results of subsidiaries in countries with
different tax rates, having a favorable effect of 1.5%.
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The tax-exempt income related to French CICE tax
credits has an impact of 5.8%-points on the effective tax
rate (2016: 4.7%), whereas the effect of the non-tax
deductible French business tax (CVAE) was 3.8%-points
in 2017 (2016: 3.5%-points). The combined effect is 2%
(2016: 1.2%) and is higher than in 2016 due to increased
results in our French business and an increase in CICE
in 2017. The other tax-exempt income and non-tax
deductible expenses had a positive effect of 3.8%-points
(2016: 4.5%-points).
'Changes in statutory applicable tax rates and effects of
prior years', had an effect of 10.1%-points on the
effective tax rate, which is an increase of 8.8%-points
compared to 2016. The main drivers for this increase are
the effects of tax rate decreases in the USA, France, and
Belgium, which lowered the value of deferred taxes as
per year-end.
'Change in valuation of deferred tax assets and other' is
the result of the assessment of recoverability of tax
assets in various countries. In 2017, these assessments
resulted in a decrease in the allowances recorded,
mainly related to France. Replacement of the French
CICE by other measures to reduce the cost of labor as
of 2019 will lead to expected taxable profits as of this
year.
4.4 revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for services rendered during the
year to third parties. Revenue from services rendered is
recognized in the income statement in proportion to the
progress in execution of the contract as of the balance
sheet date. Progress in execution of the contract is
measured by reference to costs (mainly hours) incurred
to date as a percentage of total estimated costs for each
contract. When the outcome of the contract cannot be
measured reliably, revenue is recognized only to the
extent that expenses incurred are eligible to be
recovered. No revenue is recognized if there are
significant uncertainties regarding recovery of the
consideration.
Revenue from temporary placements includes the
amounts received or receivable for the services of
candidates, including the salary and salary-related
employment costs of these candidates (gross basis).
These revenues are generally based on the number of
hours worked by these candidates.
Revenue from permanent placements includes the fee
received or receivable for the services provided. This fee
is generally a percentage of the candidate's
remuneration package (net basis). The revenue of these
permanent placements is recognized on completion of
the service, being, in principle, the start date of the
candidate. For 'retained assignments', revenue is
recognized on the completion of certain pre-agreed
stages of the service, for which the fee is non-
refundable. Allowances are established to estimate
losses due to placed candidates not remaining
employed during the agreed guarantee period.
For the job posting and résumé services of Monster
Worldwide Inc., revenue is recognized based on
(statistical) usage during the term of the contract, based
on the specific underlying elements of the contract and
service.
In situations where the Group is the principal in the
transaction and has risks and rewards of ownership, the
transactions are recorded gross in the statement of
comprehensive income. When the Group acts as an
agent, such as in cases where the Group acts as a
managed services provider, revenues are reported on a
net basis.
4.4.1 revenue categories
Revenue categories are our service concepts plus
Global Businesses. Three different service concepts are
reported: 'Staffing', 'Inhouse Services', and
'Professionals'. All service concepts have activities in all
parts of the world. For a more detailed description of
these service concepts, see the section 'our value for
clients and candidates'.
See note 5 for an update of our segment reporting
starting 2017. As a result, also the (secondary)
segmentation on revenue categories changed.
Comparative figures for the year 2016 have been
adjusted accordingly for presentation purposes.
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revenue by revenue category
2017
2016
Staffing
12,197.2
11,412.6
Inhouse Services
5,185.4
4,460.5
Professionals
4,719.7
4,069.9
Global businesses
1,194.9
761.7
Elimination of intercompany revenue
(24.4)
(17.6)
23,272.8
20,684.1
5 segment reporting
Segments are 'geographical areas' and are reported in a
manner consistent with internal management reporting
provided to the Executive Board.
As a result of acquisitions and changes in the
governance and managerial reporting structure of the
Group, the external (primary) segmentation has
changed as of 2017; comparative figures for prior
periods have been adjusted accordingly for
presentation purposes. The main changes concern the
creation of a segment called Global Businesses, which
consists of Monster, Randstad Sourceright, RiseSmart,
and twago. Italy is now reported as a separate segment
due to increasing size, while the UK is now included in
the segment ‘Other European countries’ due to its
limited size. Ausy is included in the existing
geographies, mainly France, Belgium & Luxembourg,
Germany, and North America. External (secondary)
segmentation on revenue categories now also shows
Global Businesses besides Staffing, Inhouse Services,
and Professionals; comparative figures for prior periods
have been adjusted accordingly for presentation
purposes. As a result of this new external segmentation,
intersegment revenues are included in our tables.
'Corporate' is also included in the disclosures on
segments, and represents the unallocated part of assets
and liabilities of holding activities, as well as the income
and expenses of holding activities; the latter net after
management charges to geographical areas.
5.1 income statement
segmentation income statement
revenue 2017
revenue 2016
gross profit
operating profit
total
intersegment
third party
total intersegment
third party
2017
2016
2017
2016
North America
4,230.5
-
4,230.5
4,244.6
-
4,244.6
964.2
954.1
221.6
222.4
Netherlands
3,336.9
3.0
3,333.9
3,176.8
4.5
3,172.3
604.1
581.5
185.2
180.0
France
3,627.7
0.7
3,627.0
3,044.0
0.4
3,043.6
629.1
490.7
180.2
154.2
Germany
2,335.2
0.1
2,335.1
2,082.7
-
2,082.7
396.3
356.0
111.6
93.1
Belgium & Luxembourg
1,570.3
1.7
1,568.6
1,371.5
1.4
1,370.1
317.2
287.3
99.1
84.8
Iberia
1,427.4
-
1,427.4
1,275.1
-
1,275.1
191.1
168.9
73.3
56.1
Italy
1,504.1
-
1,504.1
1,006.2
-
1,006.2
225.7
164.1
77.7
43.7
Other European countries
2,158.2
7.0
2,151.2
1,989.6
6.1
1,983.5
368.7
360.0
45.4
33.0
Rest of the world
1,912.0
0.7
1,911.3
1,749.5
-
1,749.5
344.2
312.0
43.0
15.5
Global businesses
1,194.9
11.2
1,183.7
761.7
5.2
756.5
671.4
261.9
(95.2)
(15.7)
Corporate
-
-
-
-
-
-
-
-
(82.2)
(76.5)
Elimination
(24.4)
(24.4)
-
(17.6)
(17.6)
-
(6.5)
(2.3)
-
-
Total
23,272.8
-
23,272.8
20,684.1
-
20,684.1
4,705.5
3,934.2
859.7
790.6
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segmentation income statement
amortization and impairment of
acquisition-related intangibles and
goodwill
EBITA
depreciation/amortization of
property, plant, equipment, and
software, including impairments
EBITDA
2017
2016
2017
2016
2017
2016
2017
2016
North America
9.6
16.7
231.2
239.1
13.4
14.3
244.6
253.4
Netherlands
5.3
6.2
190.5
186.2
11.7
11.5
202.2
197.7
France
33.7
10.8
213.9
165.0
13.6
13.4
227.5
178.4
Germany
0.6
0.7
112.2
93.8
4.4
3.7
116.6
97.5
Belgium & Luxembourg
0.0
3.1
99.1
87.9
5.5
5.2
104.6
93.1
Iberia
-
3.5
73.3
59.6
2.4
2.2
75.7
61.8
Italy
5.0
4.0
82.7
47.7
3.7
2.1
86.4
49.8
Other European countries
15.4
19.9
60.8
52.9
5.8
7.0
66.6
59.9
Rest of the world
9.9
19.8
52.9
35.3
10.7
7.9
63.6
43.2
Global businesses
54.5
16.7
(40.7)
1.0
14.6
2.8
(26.1)
3.8
Corporate
-
-
(82.2)
(76.5)
1.1
4.0
(81.1)
(72.5)
Elimination
-
-
-
-
-
-
-
-
Total
134.0
101.4
993.7
892.0
86.9
74.1
1,080.6
966.1
5.2 statement of financial position
segmentation statement of financial position
property, plant &
equipment
software
goodwill
acquisition-related
intangible assets
operating working capital
total assets
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
North America
20.2
25.2
20.6
18.1
554.8
599.3
-
10.2
328.6
333.1
1,233.2
1,331.2
Netherlands
43.7
45.1
1.0
2.0
854.9
809.7
19.7
0.0
(111.6)
(77.9)
1,450.1
1,371.3
France
22.8
18.8
7.6
7.2
512.8
431.7
139.0
0.0
11.1
(13.5) 2,099.4
1,577.6
Germany
4.6
3.5
5.4
5.6
291.5
212.9
12.3
2.3
61.5
18.0
720.0
545.0
Belgium & Luxembourg
6.8
7.5
2.2
3.9
156.0
125.0
0.1
0.1
65.4
42.6
457.9
374.3
Iberia
6.6
6.1
0.5
0.4
0.9
0.9
-
0.0
150.6
139.8
357.7
306.7
Italy
7.5
5.4
7.4
3.7
58.6
58.6
6.6
11.7
97.1
89.0
427.7
375.0
Other European countries
9.0
9.3
7.2
8.2
305.6
315.3
39.3
55.7
159.7
130.2
820.8
794.8
Rest of the world
11.2
13.0
7.0
10.0
143.0
152.0
12.4
23.2
77.1
73.9
491.6
512.9
Global businesses
20.2
31.4
20.9
7.5
199.2
227.7
168.8
250.0
33.3
(30.0)
877.3
999.3
Corporate
1.7
-
0.3
0.6
-
-
-
-
16.6
6.9
83.8
107.4
Eliminations
-
-
-
-
-
-
-
-
-
-
(100.0)
(147.8)
Total
154.3
165.3
80.1
67.2
3,077.3
2,933.1
398.2
353.2
889.4
712.1
8,919.5
8,147.7
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5.2.1 total assets
Assets by segment include total assets excluding
deferred income tax assets, current income tax
receivables, and cash and cash equivalents.
total assets
2017
2016
Total assets
9,762.9
9,125.9
Less:
Deferred income tax assets
437.9
520.2
Current income tax receivables
79.2
72.2
Cash and cash equivalents
326.3
385.8
Assets by segment
8,919.5
8,147.7
5.2.2 operating working capital
Operating working capital includes current assets,
excluding cash and cash equivalents, current income
tax receivables, and the current part of loans and
receivables, minus current liabilities, excluding current
borrowings, current income tax liabilities, and the
current part of provisions, of employee benefit
obligations, and of other liabilities. Deferred receipts
from disposal of subsidiaries, as well as the net interest
payable, are also excluded in order to align the
presentation of the movements in these latter two items,
which are presented under net cash flow from investing
activities and financing activities respectively.
operating working capital
2017
2016
Current assets
5,085.5
4,632.2
Current liabilities
(4,630.9) (4,036.7)
Working capital
454.6
595.5
Current assets
5,085.5
4,632.2
Adjusted for:
Cash and cash equivalents
(326.3)
(385.8)
Current income tax receivables
(79.2)
(72.2)
Current part of loans and receivables
(102.3)
(69.9)
Interest receivable
0.0
0.0
Operating working capital assets
4,577.7
4,104.3
Current liabilities
(4,630.9) (4,036.7)
Adjusted for:
Current borrowings
712.5
480.0
Current income tax liabilities
116.2
70.6
Current provisions
72.2
68.7
Current employee benefit obligations
13.3
13.2
Current other liabilities
22.4
6.7
Interest payable
6.0
5.3
Operating working capital liabilities
(3,688.3) (3,392.2)
Operating working capital assets
4,577.7
4,104.3
Operating working capital liabilities
(3,688.3) (3,392.2)
Operating working capital
889.4
712.1
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6 business combinations
6.1 information about acquisitions
During 2017 and 2016, the following companies were
acquired:
business combinations
company
acquired %
of shares
acquisition date
2017
Ausy SA (France)
100%
January 30
BMC Groep bv (Netherlands)
100%
January 12
SageCo Pty Ltd (Australia)
100%
January 12
eSolve AG (Germany)
100%
December 31
2016
Proffice AB (Sweden)
100%
February 4
'twago' (Germany)
100%
June 14
O(biettivo) L(avoro) Group Srl
(Italy)
100%
July 1
Careo Holding KK (Japan)
100%
July 1
Monster Worldwide Inc. (USA)
100%
November 1
The main activities of Ausy, BMC, and eSolve are in the
Professionals segment (professional specialist staffing);
Sageco is mainly active in the outplacement business.
Ausy offers its services mainly in France, Germany,
Belgium, and the USA. Ausy was acquired following a
public offer.
BMC offers its services in the public sector in the
Netherlands. eSolve offers its services mainly in
Germany.
The main activities of Proffice, OL, and Careo are general
staffing (all three), professional/specialist staffing
(Proffice and Careo), and recruitment services (Proffice).
Monster is a global online employment solution for
people seeking jobs and employers seeking people.
Monster provides job seeking, career management,
recruitment, and talent management capabilities.
Twago offers a digital platform for freelancers and
clients. In June 2016, the Group increased its
shareholding in twago to 100%. Before that date, twago
was recorded as an equity investment. For further
information, see note 16.2 equity investments.
Proffice AB and Monster Worldwide Inc. were acquired
following a public offer.
The acquisitions made in 2017 and 2016 are in line with
Randstad's mid- to long-term strategy to grow in
(specialist) professionals activities and to strengthen our
market position in certain markets and/or countries, and
with our Tech & Touch growth strategy, which includes
complementing Randstad's activities with technology
platforms and easy-to-use digital, social, and mobile
solutions.
The fair value of the assets and liabilities arising from the
above-mentioned acquisitions, based on (provisional)
purchase allocations, can be summarized as follows:
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ausy
other
total 2017
total 2016
Property, plant, equipment and software
4.1
1.2
5.3
39.7
Acquisition-related intangible assets
172.7
36.1
208.8
329.3
Deferred tax assets
17.8
0.9
18.7
24.4
Financial assets
16.1
-
16.1
-
Associates
0.1
-
0.1
19.1
Total non-current assets
210.8
38.2
249.0
412.5
Working capital assets / (liabilities)
108.5
14.8
123.3
(69.4)
Non-current borrowings
106.5
0.0
106.5
128.3
Provisions and employee benefit obligations
21.7
1.1
22.8
26.8
Deferred income tax liabilities
54.0
9.1
63.1
32.7
Other liabilities
0.5
0.0
0.5
0.9
Total non-current liabilities
182.7
10.2
192.9
188.7
Non-controlling interest
0.0
0.0
-
0.4
Net assets acquired
136.6
42.8
179.4
154.0
Goodwill
202.9
53.4
256.3
441.2
Total consideration
339.5
96.2
435.7
595.2
Net (cash) acquired included in working capital
(52.3)
(18.9)
(71.2)
(20.8)
Non-current borrowings acquired
106.5
-
106.5
128.3
Net debt/(cash) acquired
54.2
(18.9)
35.3
107.5
Consideration, adjusted for net debt/(cash) acquired
393.7
77.3
471.0
702.7
Deferred compensation on acquisitions
-
(17.2)
(17.2)
(2.6)
Consideration paid in respect of acquisitions in preceding years
-
0.9
0.9
-
Consideration paid, adjusted for net debt/(cash) acquired
393.7
61.0
454.7
700.1
Deduct: Non-current borrowings acquired
(106.5)
-
(106.5)
(128.3)
Statement of cash flows, acquisition of subsidiaries
287.2
61.0
348.2
571.8
In the table above, included in 'other' are the
acquisitions in 2017 of BMC Groep BV, SageCo Pty Ltd,
and eSolve AG, as well as the adjustments for
finalizations of purchase price allocations in 2017 for our
acquisitions in 2016. See note 4.1.2 for further
information.
In 2017, the companies acquired in 2017 contributed
approximately € 537 million to the Group's revenue and
approximately € 39 million to the Group's EBITA. If these
acquisitions had occurred on January 1, 2017, the
contribution to the Group's revenue and EBITA would
have been higher by approximately € 56 million and
€ 4 million respectively (Ausy € 40 million and € 2 million
respectively).
In 2016, included in goodwill and tangibles are amounts
of € 193 million and € 215 million respectively, which are
considered to be deductible for tax purposes.
accounting policy
The Group uses the acquisition method to account for
the acquisition of subsidiaries.
Goodwill at acquisition date is measured as:
• The fair value of the consideration transferred, being
the fair value of the assets given and liabilities incurred
or assumed; plus
• The recognized amount of any non-controlling
interests in the acquiree; plus
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• The fair value of any previous equity interests in the
acquiree (if the business combination is achieved in
stages); less
• The fair value of the identifiable assets acquired and
liabilities assumed (including contingent liabilities).
When this difference is negative ('negative goodwill' or
badwill), this amount is recognized directly in total
operating expenses.
All considerations transferred to acquire a business are
recorded at fair value as at the acquisition date;
subsequent changes to the fair value of the contingent
considerations classified as debt are recognized as
expenses or income.
The Group recognizes any non-controlling interest in the
acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's
proportionate share of the recognized amounts of the
acquiree's identifiable net assets.
All acquisition-related costs are expensed and included
in other general and administrative expenses.
6.2 information about disposals
reconciliation of cash flow disposals
2017
2016
Goodwill
0.1
Working capital
0.8
Net assets and liabilities
0.9
Gain on disposal
0.0
Total consideration
0.9
Deferred receipts, net
0.0
Consideration received in respect of the
disposal of subsidiaries and activities
0.9
Net cash of disposed subsidiaries and
activities
(0.2)
Disposal of subsidiaries and activities,
statement of cash flows
-
0.7
accounting policy
Upon disposal of a subsidiary, the gain or loss upon
disposal is included in other general and administrative
expenses. See note 4.1.2 for further information.
7 earnings per ordinary
share
2017
2016
Net income
631.4
588.2
Net income attributable to holders of ordinary
shares
618.8
575.4
Amortization and impairment of acquisition-
related intangible assets and goodwill (after taxes)
88.8
72.1
Net income attributable to holders of ordinary
shares before amortization and impairment of
acquisition-related intangible assets and goodwill
707.6
647.5
Numbers of ordinary shares (in millions)
Weighted average number of ordinary shares
outstanding
183.1
182.7
Dilutive effect of share-based compensation
arrangements
0.9
1.1
Weighted average number of diluted ordinary
shares outstanding
184.0
183.8
Earnings per ordinary share (in €)
Basic earnings per ordinary share
3.38
3.15
Diluted earnings per ordinary share
3.36
3.13
Basic earnings per ordinary share are calculated by
dividing net income attributable to the holders of
ordinary shares by the weighted average number of
ordinary shares outstanding during the year. The issued
number of ordinary shares is adjusted for ordinary
shares purchased by Randstad Holding nv, which are
held as treasury shares.
Diluted earnings per ordinary share are calculated by
adjusting the weighted average number of ordinary
shares outstanding, assuming conversion of all dilutive
potential ordinary shares. The dilutive potential ordinary
shares arise from various share-based compensation
arrangements.
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8 cost of services and total
operating expenses
8.1 cost of services
Cost of services comprises expenses directly
attributable to revenue. These costs mainly include
expenses related to candidates, such as wages, salaries,
and social charges.
cost of services
2017
2016
Wages and salaries
14,758.1
13,447.0
Social security charges
2,871.6
2,544.5
Pension charges - defined contribution
plans
128.3
114.9
Pension charges - defined benefit plans
8.3
6.7
Wages, salaries, social security and
pension charges
17,766.3
16,113.1
Depreciation of property, plant and
equipment
1.7
1.3
Other cost of services
799.3
635.5
18,567.3
16,749.9
8.2 operating expenses
Operating expenses are classified based on the
functional model and are recognized in the year to
which they relate.
8.2.1 selling expenses
Selling expenses comprise personnel and
accommodation expenses in relation to operational
activities at the outlets, advertising and marketing, and
other selling expenses.
Selling expenses include an amount of € 14.2 million
(2016: € 9.2 million) related to impairment losses on
trade receivables, as well as debt collection costs.
8.2.2 general and administrative expenses
General and administrative expenses comprise
personnel and accommodation expenses of head
offices, IT expenses, other general and administrative
expenses, as well as the amortization and impairment of
acquisition-related intangible assets and goodwill.
Other general and administrative expenses include:
• Foreign exchange gains of € 2.0 million (2016:
€ 2.3 million);
• A loss on the sale of property, plant and equipment of
€ 1.0 million (2016: € 0.2 million);
The acquisition related expenses for the acquired
companies/activities amount to € 3.9 million (2016:
€ 13.9 million).
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8.2.3 total operating expenses by nature
total operating expenses by nature
2017
2016
Wages and salaries
2,033.0
1,699.0
Social security charges
359.3
296.1
Pension charges - defined contribution plans
40.2
38.1
Pension charges - defined benefit plans
7.7
8.7
Share-based compensations
32.5
31.3
Wages, salaries, social security and pension
charges
2,472.7
2,073.2
Other personnel expenses
244.3
205.6
Personnel expenses
2,717.0
2,278.8
Depreciation and impairment of property, plant
and equipment
52.8
48.7
Amortization and impairment of software
32.4
24.1
Advertising and marketing
229.3
131.4
Accommodation
240.8
196.1
Other
439.5
363.1
Operating expenses
3,711.8
3,042.2
Amortization and impairment of acquisition-
related intangible assets and goodwill
134.0
101.4
Total operating expenses
3,845.8
3,143.6
8.3 depreciation, amortization and
impairment of property, plant,
equipment, and software
depreciation, amortization and impairment of property,
plant and equipment, and software
2017
2016
Depreciation of buildings
1.2
1.2
Depreciation of computer hardware
22.7
18.6
Depreciation of leasehold
improvements and furniture and fixtures
30.6
26.7
Impairment of computer hardware
-
3.5
Depreciation and impairment of
property, plant and equipment
54.5
50.0
Amortization of software
29.5
24.1
Impairment of software
2.9
-
Amortization and impairment of
software
32.4
24.1
Depreciation and impairment of
property, plant, equipment and software
86.9
74.1
Included in:
Cost of services
1.7
1.3
Selling expenses
20.3
19.5
General and administrative expenses
64.9
53.3
86.9
74.1
8.4 amortization and impairment of
acquisition-related intangible assets
and goodwill
amortization and impairment of acquisition-related
intangible assets and goodwill
2017
2016
Amortization of acquisition-related
intangible assets
134.0
91.5
Impairment of goodwill
-
9.9
134.0
101.4
For impairment of goodwill, see note 4.1.2.
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8.5 operating leases
For operating leases, an amount of € 274 million
expenses (2016: € 240 million) is included in operating
profit.
Lease contracts of which the majority of risks and
rewards inherent to ownership do not lie with the Group
are classified as operating leases. Expenses related to
operating leases are included in operating expenses
and/or cost of services on a straight-line basis over the
term of the lease.
8.6 grants
Grants are recognized when there is reasonable
assurance that they will be received and that the Group
will comply with the conditions attached to them.
Grants that compensate for expenses incurred are
credited to operating expenses and/or cost of services
on a systematic basis in the same period in which the
expenses are incurred.
Grants included in operating profit amount to
€ 33.6 million (2016: € 25.3 million), of which
€ 28.9 million (2016: € 22.1 million) is reported under
cost of services. Grants mainly relate to the
compensation (in whole or in part) of the costs of
education of candidates and of the costs to employ
selected categories of employees.
9 total wages and salaries,
social security and pension
charges
Wages, salaries, social security charges and pension
charges are included in cost of services for candidates
and in personnel expenses for corporate employees.
total amounts of wages and salaries, social security and
pension charges
2017
2016
Wages and salaries
16,791.1
15,146.0
Social security charges
3,230.9
2,840.6
Pension charges - defined contribution
plans
168.5
153.0
Pension charges - defined benefit plans
16.0
15.4
Share-based compensations
32.5
31.3
20,239.0
18,186.3
10 net finance costs
net finance costs
2017
2016
Finance income
Interest and similar income
3.8
3.0
Changes in value of other liabilities1
3.2
3.9
Changes in value of other long-term debt1
-
3.9
Interest due to passage of time1
3.8
4.2
Foreign exchange gain, net1
-
3.8
10.8
18.8
Finance expenses
Interest and similar expenses
7.3
7.0
Interest and commitment fees on non-current
borrowings
13.5
7.6
Dividend on non-controlling interests classified
as other liabilities
0.7
0.9
Amortization of transaction cost non-current
borrowings1
1.6
2.2
Interest due to passage of time1
4.1
4.3
Changes in value of equity investments1
-
0.6
Foreign exchange losses, net1
6.1
-
33.3
22.6
Net finance costs
22.5
3.8
1 Items considered non-cash.
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Net finance costs comprise interest expenses and
interest income, as well as items similar to interest and
exchange differences on cash, cash equivalents, and
borrowings. Interest expenses and income are
recognized in the income statement on a time-
proportion basis, using the effective interest method.
Interest due to the passage of time of loans and
receivables, and deferred considerations, as well as in
relation to the valuation of certain provisions and
employee benefit obligations, are also included in net
finance costs. Changes in the value of deferred
considerations and differences upon settlement of
these deferred considerations (see note 20), as well as
dividend paid to non-controlling interests classified as
other liabilities, are also reported under net finance
costs.
finance income expenses, statement of cash flows
2017
2016
Finance income
10.8
18.8
Non-cash items
7.0
15.8
Cash items
3.8
3.0
Change in interest receivable
-
0.2
Finance income, statement of cash flows
3.8
3.2
Finance expenses
33.3
22.6
Non-cash items
11.8
7.1
Cash items
21.5
15.5
Acquisition of subsidiaries
0.7
-
Change in interest payable
(0.7)
(0.5)
Finance expenses, statement of cash flows
21.5
15.0
11 net income
Net income includes foreign exchange losses of
€ 6.1 million (2016: € 3.8 million). For other items
included in net income, see note 8.2.
12 total other
comprehensive income
2017
2016
Translation differences
(167.8)
9.5
Tax on translation differences
(15.0)
6.7
Translation differences, net of taxes
(182.8)
16.2
Items that subsequently may be reclassified to
the income statement
(182.8)
16.2
Remeasurements of post-employment benefits
26.3
(9.1)
Tax on remeasurements of post-employment
benefits
(8.7)
2.6
Fair value adjustments of equity investments
0.8
0.3
Items that will never be reclassified to the
income statement
18.4
(6.2)
Total comprehensive income, net of taxes
(164.4)
10.0
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13 property, plant and equipment
buildings and land
computer
hardware
leasehold improvements,
furniture and fixtures
total
Balance at January 1, 2017
26.4
43.7
95.2
165.3
Movements in 2017
Acquisition of subsidiaries
-
1.6
2.4
4.0
Additions
-
21.6
37.1
58.7
Disposals
-
(3.1)
(9.5)
(12.6)
Depreciation/impairment
(1.2)
(22.7)
(30.6)
(54.5)
Translation differences
(1.2)
(2.3)
(3.1)
(6.6)
Balance at December 31, 2017
24.0
38.8
91.5
154.3
Cost
60.5
258.8
402.9
722.2
Accumulated depreciation and impairment
36.5
220.0
311.4
567.9
Balance at December 31, 2017
24.0
38.8
91.5
154.3
Balance at January 1, 2016
Cost
62.0
179.2
359.8
601.0
Accumulated depreciation and impairment
35.3
145.8
295.0
476.1
26.7
33.4
64.8
124.9
Movements in 2016
Acquisition of subsidiaries
0.3
14.7
15.0
30.0
Additions
0.2
18.0
44.1
62.3
Disposals
-
(0.7)
(2.7)
(3.4)
Depreciation/impairment
(1.2)
(22.1)
(26.7)
(50.0)
Translation differences
0.4
0.4
0.7
1.5
Balance at December 31, 2016
26.4
43.7
95.2
165.3
Cost
63.4
277.7
444.3
785.4
Accumulated depreciation and impairment
37.0
234.0
349.1
620.1
Balance at December 31, 2016
26.4
43.7
95.2
165.3
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Based on appraisals made by independent and expert
appraisers, the estimated fair value of buildings and land
is € 10 to € 15 million higher than the carrying amount.
The fair value represents the market value, taking into
account that the property is in a rented status.
Included under depreciation/impairment is an
impairment in 2016 of computer hardware of
€ 3.5 million, as a result of a redesign of our IT strategy.
In the consolidated statement of cash flows, proceeds
from the sale of property, plant and equipment
comprise:
proceeds from disposals
2017
2016
Net book value of disposals
12.6
3.4
Loss on disposals
(1.0)
(0.2)
Disposals of property, plant and
equipment, statement of cash flows
11.6
3.2
accounting policy
Property, plant and equipment are stated at historical
cost less accumulated depreciation and impairment
losses. Historical cost includes expenditures that are
directly attributable to the acquisition of the assets.
Land is not depreciated. Depreciation on other property,
plant and equipment is charged to operating expenses
and/or cost of services on a straight-line basis over their
estimated useful lives, from the date they are available
for use.
The residual values and useful lives are reviewed as at
each balance sheet date and adjusted, if appropriate.
Gains and losses arising on disposal are included in the
income statement under other general and
administrative expenses.
estimated useful lives of property, plant and equipment
on average
term
Buildings
33 years
Computer hardware
4 years
Leasehold improvements
5 years
Furniture and fixtures
4-5 years
Leasehold improvements are depreciated over the term
of the initial lease, in the event that this term is shorter
than five years.
Impairments, if any, are mainly caused by the
discontinuation of outlets. The net book value of
leasehold improvements and other furniture and
fixtures is impaired to the recoverable amount, based on
each individual case. The recoverable amount tends to
be zero.
14 software
software
2017
2016
Cost
400.6
295.3
Accumulated amortization and
impairment
333.4
249.5
Balance at January 1
67.2
45.8
Acquisition of subsidiaries
1.3
9.7
Additions
48.6
34.9
Amortization and impairment
(32.4)
(24.1)
Translation differences
(4.6)
0.9
Balance at December 31
80.1
67.2
Cost
373.8
400.6
Accumulated amortization and
impairment
293.7
333.4
Balance at December 31
80.1
67.2
accounting policy
Acquired software (licenses) and developed software
are stated at cost less accumulated amortization and
impairment losses.
Expenditures in relation to the development of
identifiable and unique software (or significant
enhancements to existing software) used by the Group,
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and which will probably generate economic benefits
exceeding costs beyond one year, are recognized as
software and amortized over their estimated useful lives.
Capitalized costs include employee costs of software
development and third party expenses.
Expenditures associated with small enhancements or
maintenance of software are recognized as an expense
when incurred.
Amortization of software applications is charged to
operating expenses and/or cost of services on a
straight-line basis over the estimated useful lives, from
the date they are available for use.
The residual values and useful lives are reviewed as at
each balance sheet date and adjusted, if appropriate.
Internally developed software and purchased software
are amortized on a straight-line basis over the useful
lives of 3 to 5 years or, in case of licenses, if the license
period is shorter than 3 years, over this shorter period.
Impairments, if any, are mainly caused by the
discontinuation of software applications. The net book
value of software is impaired to its recoverable amount,
which tends to be zero, based on each individual case.
15 acquisition-related intangible assets
customer relationships
brand names
candidate profiles
technology
total
Balance at January 1, 2017
117.4
82.2
87.3
66.3
353.2
Movements in 2017
Acquisition of subsidiaries
177.0
29.6
2.2
-
208.8
Amortization
(70.4)
(18.1)
(32.7)
(12.8)
(134.0)
Translation differences
(6.1)
(8.5)
(7.9)
(7.3)
(29.8)
Balance at December 31, 2017
217.9
85.2
48.9
46.2
398.2
Cost
290.4
112.9
87.7
63.0
554.0
Accumulated amortization and
impairment
72.5
27.7
38.8
16.8
155.8
Balance at December 31, 2017
217.9
85.2
48.9
46.2
398.2
Balance at January 1, 2016
Cost
777.2
8.1
-
15.9
801.2
Accumulated amortization and
impairment
691.6
0.5
-
0.6
692.7
85.6
7.6
-
15.3
108.5
Movements in 2016
Acquisition of subsidiaries
101.2
82.4
92.8
52.9
329.3
Amortization
(69.0)
(10.1)
(8.2)
(4.2)
(91.5)
Translation differences
(0.4)
2.3
2.7
2.3
6.9
Balance at December 31, 2016
117.4
82.2
87.3
66.3
353.2
Cost
279.8
92.9
95.7
71.4
539.8
Accumulated amortization and
impairment
162.4
10.7
8.4
5.1
186.6
Balance at December 31, 2016
117.4
82.2
87.3
66.3
353.2
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accounting policy
Acquisition-related intangible assets (customer
relationships (including franchise agreements), brand
names, candidate profiles, and developed technology)
that are acquired by the Group are stated at cost less
accumulated amortization and impairment losses.
When an intangible asset is acquired in a business
combination, its cost is the fair value at the date of its
acquisition. This cost is determined on a basis that
reflects an amount that the entity would have paid for
the asset in an arm's length transaction between
knowledgeable and willing parties, based on the best
information available. If the fair value cannot be
measured reliably, the asset is not recognized as a
separate intangible asset, but is included in goodwill.
Amortization of acquisition-related intangible assets is
charged to total operating expenses on a straight-line
basis over their estimated useful lives, from the date
they are available for use. If the asset is fully amortized,
the at cost value is reversed against accumulated
amortization.
The residual values and useful lives are reviewed as at
each balance sheet date and adjusted, if appropriate.
The estimated useful life of customer relationships is 4
to 8 years, of brand names 1 to 10 years, of candidate
profiles 2 to 3 years, and of technology 5 to 6 years.
Technology relates to the software platforms acquired
in acquisitions and in use as an integral part of our
business activities.
Impairments, if any, can be the result of either the
evidence that the assumptions for determining the
estimated useful lives are incorrect or the annual
impairment test of the cash-generating unit (or
operating segment) to which the acquisition-related
intangible assets are related.
16 financial assets
Investments in financial assets are divided into various
categories. Classification of these investments depends
on the purposes for which the investments have been
acquired. Management determines the classification at
the time of the purchase and re-evaluates such
designation at each subsequent balance sheet date.
As at December 31, 2016, management decided to
present the French housing loans under 'Loans and
receivables' (instead of separately as 'Held-to-maturity
investments'), which presentation continued as at
December, 2017. This classification on the balance sheet
has no effect on valuation or the income statement.
Purchase and sale of financial assets are recognized on
the settlement date, which is the date an asset is
delivered to or by the Group. The cost of financial assets
includes transaction costs.
financial assets
2017
2016
Loans and receivables
479.9
413.3
Equity investments
27.8
22.3
Financial assets
507.7
435.6
16.1 loans and receivables
Loans and receivables are initially recognized at fair
value and subsequently measured at amortized cost,
using the effective interest method.
Loans and receivables are neither past due nor impaired.
These financial assets have counterparties such as
governmental or semi-governmental bodies.
The Group does not hold any collateral as security.
Loans and receivables comprise financial assets relating
to our French subsidiaries.
loans and receivables
2017
2016
Loans
106.3
97.9
CICE receivable
373.6
315.4
Loans and receivables
479.9
413.3
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16.1.1 loans
loans
2017
2016
Balance at January 1
100.4
97.4
Acquisition of subsidiaries
1.3
-
Additions at fair value
7.0
6.2
Redemptions
(2.6)
(7.0)
Interest due to passage of time
3.8
3.8
Balance at December 31
109.9
100.4
Non-current portion
106.3
97.9
Current portion
3.6
2.5
Balance at December 31
109.9
100.4
Loans represent 'housing loans' that are granted
interest-free by the French subsidiaries annually in
relation to legal arrangements for payment of certain
social security charges. These annual loans have a
repayment term of 20 years each. These investments
have an average remaining term of 11 years (2016: 12
years) and an effective interest rate of 3.7% (2016: 4.1%).
The nominal value of held-to-maturity investments
amounts to € 152 million (2016: € 144 million) and best
represents the maximum exposure to credit risk. As at
December 31, 2017, the fair value was approximately
€ 28 million higher than the carrying amount (2016:
€ 30 million).
The difference between additions at nominal value
(€ 9.4 million) and at fair value is recognized in cost of
services, and amounts to € 2.4 million (2016: € 8.1 million
and € 1.9 million respectively).
16.1.2 CICE receivable
CICE receivable
2017
2016
Balance at January 1
382.8
272.1
Acquisition of subsidiaries
14.8
-
Additions at fair value
144.9
110.3
Redemptions
(70.2)
-
Interest due to passage of time
-
0.4
Balance at December 31
472.3
382.8
Non-current portion
373.6
315.4
Current portion
98.7
67.4
Balance at December 31
472.3
382.8
This financial asset arises from tax credits under the
French Competitive Employment Act (CICE). This act is
aimed at improving the competitiveness of the French
economy and at reducing unemployment. The tax credit
is calculated as a percentage of wages and salaries paid
to employees with a salary that is less than 2.5 times the
French minimum wage. The tax credit can be offset
against the income tax liability payable with respect to
the calendar year to which the wages relate. Any excess
credit on an annual basis can be carried forward and
offset against the tax liability during the next three years.
Any excess after three years will also be refunded.
This receivable is presented under non-current assets,
since the amount is expected to have a maturity of
longer than one year, due to the combined effect of the
legal regulations of the CICE arrangements and the
income tax situation of our French operations, except
for the part that is due in the coming 12 months up to
December 31, 2018, which is presented under current
receivables. In the statement of cash flows, the yearly
additions at fair value of the CICE receivable are
presented in 'other items' under cash flow from
operating activities, since the CICE arrangements are
considered to be related to the operating activities.
Redemptions on the CICE receivable are presented in
these 'other items' as well. The nominal value of the
receivable amounts to € 472.3 million (2016:
€ 382.8 million), which best represents the maximum
exposure to credit risk. As at December 31, 2017, the
carrying amount equals the fair value.
16.2 equity investments
equity investments
2017
2016
Balance at January 1
22.3
13.3
Fair value adjustments
0.8
(0.3)
Net additions
4.7
9.3
Balance at December 31
27.8
22.3
Equity investments are minority participations in early-
stage to expansion-stage companies that are
considered strategically relevant to Randstad. The
typical investment amounts range between € 0.5 million
and € 2 million. The Group has no significant influence
over these investments. These investments are qualified
as 'fair-value through other comprehensive income'-
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investments, and if no reliable fair-value measurements
are available, valued at cost. All investments are
considered non-current.
During the year 2016 the Group acquired 100% of the
shares of in one of its equity investments, 'twago'
(Germany). See note 6 for general information on
business combinations. The carrying amount of this
equity investment at the moment of acquisition of 100%
of the shares (€ 1.4 million), including any fair value
adjustments, is included as part of the consideration for
this subsidiary. The fair value adjustment at the moment
of the acquisition of 100% of the shares resulted in a loss
of € 0.6 million, that is recognized under net finance
costs.
The fair value of one of the investments was increased
by € 0.8 million (2016: € 0.3 million). This was based on
a share transaction and other market information.
16.3 impairment of financial assets
The carrying amounts of all financial assets in this note
are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying
amount is impaired. If objective evidence exists that a
financial asset or group of financial assets is impaired,
the amount of the impairment loss is calculated as the
difference between the carrying amount of the financial
asset and the present value of estimated future cash
flows, discounted at the original effective interest rate
(i.e., the effective interest rate computed at initial
recognition of these financial assets). The resulting
impairment loss is immediately recognized in net
finance costs.
An impairment loss on financial assets is reversed if, in
a subsequent period, the amount of the impairment loss
decreases and this decrease can be related objectively
to an event occurring after the impairment loss was
recognized. Such reversal is immediately recognized in
net finance costs.
17 associates
As at December 31, 2017, the Group has investments in
associates of € 21.9 million (2016: € 19.1 million). The
largest associate is a 16.66% shareholding in Alma
Career OY, Finland, which came with the acquisition of
Monster Worldwide in 2016. The total assets and
liabilities of associates amounted to approximately
€ 128 million and € 35 million respectively as at
December 31, 2017 (2016: € 108 million and € 29 million
respectively). Total revenue in 2017 amounted to
€ 79 million (2016: € 57 million). Our share in profit was
€ 1.2 million (2016: our share in loss € 0.8 million).
associates
2017
2016
Balance at January 1
19.1
-
Acquisition of subsidiaries
0.1
19.1
Share in profit / (loss)
1.2
(0.8)
Additions
3.3
0.3
Dividend
(1.3)
-
Translation differences
(0.5)
0.5
Balance at December 31
21.9
19.1
accounting policy
Associates are companies over which the Group has
significant influence, but not control, generally
accompanying a shareholding of between 20% and 50%
of the voting rights.
Investments in associates are accounted for using the
equity method and are initially recognized at cost. The
Group's investment in associates includes goodwill on
acquisition, net of any accumulated impairment losses.
The Group's share of the post-acquisition profits and
losses of the associates is recognized as share in results
of associates, and its share of post-acquisition
movements in other comprehensive income of the
associates, is recognized in other comprehensive
income, with a corresponding effect to the carrying
amount of the associate.
18 trade and other payables
Trade and other payables are initially stated at fair value.
Subsequent measurement is at amortized cost, using
the effective interest method.
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trade and other payables
2017
2016
Trade payables
472.0
455.0
Other taxes and social security
premiums
1,189.8
1,047.8
Pension contributions
14.4
15.4
Wages, salaries and other personnel
costs
1,451.0
1,287.2
Other accruals
469.5
474.0
Deferred income
97.6
118.1
3,694.3
3,397.5
19 total equity and
dividends per share
19.1 shareholders' equity
19.1.1 authorized and issued capital
Authorized capital is € 106 million (2016: € 106 million)
and consists of 350,000,000 (2016: 350,000,000)
ordinary shares with a nominal value of € 0.10, a further
106.000 (2016: 106,000) type-A preference shares with
a nominal value of € 500, 30,000,000 (2016:
30,000,000) type-B preference shares with a nominal
value of € 0.10, and 150,000,000 (2016: 150,000,000)
type-C preference shares with a nominal value of
€ 0.10.
At year-end, issued share capital consists of
183,264,045 ordinary shares (2016: 183,023,267),
25,200.000 type-B preference shares (2016:
25,200,000), and 50,130,352 (2016: 50,130,352) type-
C preference shares.
For information regarding the rights, preferences and
restrictions on each type of share, see 'Voting rights', in
the corporate governance section.
The current conditions of the preference shares are
such that the holders of these shares receive a dividend
at the company's discretion, that dividend is preferred
and cumulative, and that the voting rights are one vote
per 7 type-B preference shares, and one vote for each
€ 25 capital payment for type-C preference shares,
resulting in 0.1117 vote per share on average.
The dividend on preference shares is reviewed every
seven years. The last review on type-B preference shares
took place in November 2012, and the dividend was set
at € 0.177 per preference share. The dividend on type-C
preference shares was set at 5.8% of the capital
contribution. The next review of the dividend will take
place in November 2019. Only the Executive Board can
propose to the Annual General Meeting of Shareholders
to decide that preference shares be repaid.
number of outstanding ordinary and preference shares
(x 1,000)
2017
2016
ordinary
shares
preference
shares
ordinary
shares
preference
shares
January 1
183,023
75,330
183,019
75,330
Stock dividend
-
-
-
-
From share-based
compensation
arrangements
241
-
4
-
December 31
183,264
75,330
183,023
75,330
As at December 31, 2017, the company holds 424.598
treasury shares (2016: 595,141).
accounting policy
Ordinary and preference shares are classified as equity.
The distribution of the dividend on ordinary and
preference shares is recognized as a liability in the
period in which these dividends are adopted by the
company's shareholders.
On the issue of new shares or on the extension of the
term of preference shares outstanding, the proceeds
less directly attributable costs are recognized in
shareholders' equity within issued capital and, if
applicable, within share premium.
On the purchase of ordinary shares that are included in
shareholders' equity, the consideration paid, including
directly attributable costs, is recorded as a change in
shareholders' equity. Purchased ordinary shares are
classified as treasury shares and presented as a
deduction from shareholders' equity under reserves.
On the sale (or re-issue) of treasury shares, the proceeds
less directly attributable costs are recognized under
treasury shares for the original consideration paid; the
remainder is recognized as a change in retained
earnings.
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19.1.2 share premium
At year-end, share premium consists of € 1,986.0 million
share premium on ordinary shares (2016:
€ 1,972.4 million) and € 298.3 million share premium on
preference shares (2016: € 298.3 million).
19.1.3 translation reserve
The translation reserve comprises all translation
differences arising from the translation of the net
investment in activities in currencies other than the
euro, as well as translation differences of financial
liabilities designated as hedges of such investments, to
the extent that the hedge is effective. Such translation
differences are recognized initially in other
comprehensive income and presented in this separate
component of shareholders' equity. If the net
investment is disposed, these translation differences are
recognized in the statement of comprehensive income.
The translation reserve also includes the tax effect on
translation differences.
19.1.4 share-based compensations reserve
The share-based compensations reserve comprises the
value of vested rights in respect of share-based
compensation arrangements as far as stock options
have not been exercised or performance shares have
not been allocated.
The company has various share-based compensation
arrangements. Additional information about these
arrangements is given in note 23. The income statement
includes an amount of € 32.5 million (2016:
€ 31.3 million) for share-based compensations.
At year-end 2017, 1.6 million performance options and
performance shares (2016: 1.9 million) are outstanding.
Upon exercise of stock options or allocation of
performance shares, this will lead to the issuance of the
same number of new ordinary shares or re-issue of
treasury shares.
19.1.5 employee benefits reserve
The employee benefits reserve comprises the
cumulative remeasurements of post-employment
benefit obligations as from January 1, 2013
(implementation of amended IFRS standard IAS 19
'Employee benefits'). The amounts are net of corporate
taxes.
19.1.6 other information
See note 7 to the company financial statements for the
restrictions on the distribution of dividends and the
repayment of capital.
Additional information about shareholders' equity is
included in the consolidated statement of changes in
equity.
19.2 dividends on ordinary and
preference shares
dividends on ordinary and preference shares
dividend related to
2017
2016
2015
Ordinary shares
Dividend paid during 2016
307.2
Dividend paid during 2017
346.3
Dividend 2017 proposed
505.8
Preference shares
Dividend paid during 2016
12.6
Dividend paid during 2017
12.6
Dividend 2017 proposed
12.6
Statement of cashflows
358.9
319.8
19.2.1 proposed profit appropriation
At the Annual General Meeting of Shareholders, to be
held on March 27, 2018, the Executive Board, with the
approval of the Supervisory Board, will propose that a
dividend of € 2.76 per ordinary share be paid for the year
2017; the dividend of € 2.76 per ordinary share consists
of a regular dividend of € 2.07, representing a payout of
50% of basic underlying earnings per share and an
additional special cash dividend of € 0.69, following the
proposal to adjust our dividend policy (see note 3.1.1 for
further information). For preference shares B and C it will
be proposed by the Executive Board, with the approval
of the Supervisory Board, that a dividend of € 4.5 million
and € 8.1 million be paid respectively. It is further
proposed that € 113.0 million be added to retained
earnings.
19.3 non-controlling interests
In 2017, transactions took place with non-controlling
interests without a change of control (2016: no
transactions), which resulted in an amount of
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€ 0.0 million charged to equity, while the cash
consideration amounted to € 0.0 million.
accounting policy
Non-controlling interests represent the net assets not
held by the Group and are presented within total equity
in the consolidated balance sheet as a separate
category. Profit or loss and each component of other
comprehensive income are attributed to the equity
holders and to the non-controlling interests.
The Group treats transactions with non-controlling
interests as transactions with equity owners of the
Group. For acquisitions of non-controlling interests, the
difference between any consideration paid and the
relevant share acquired of the carrying value of the net
assets is recorded in equity. Gains or losses on disposals
of non-controlling interests are also recorded in equity
as long as control of the subsidiary is maintained.
Additional information about non-controlling interests is
included in the consolidated statement of changes in
equity.
20 other liabilities
other liabilities
2017
2016
Balance at January 1
19.3
21.5
Deferred considerations in acquired
subsidiaries
0.5
0.9
Changes in value
(3.2)
(3.9)
Deferred compensations from acquired
subsidiaries
17.2
2.6
Considerations paid in respect of
acquisitions in preceding years
(0.9)
-
Interest due to passage of time
0.8
1.0
Translation differences
(0.7)
(2.8)
Balance at December 31
33.0
19.3
Non-current portion
10.6
12.6
Current portion
22.4
6.7
Balance at December 31
33.0
19.3
The effective interest rate amounts to 5.0% (2016:
5.0%).
accounting policy
Other liabilities mainly include liabilities arising from
arrangements with the previous owners of acquired
companies who still hold a non-controlling interest
('deferred considerations') and deferred payments from
other business combinations.
With respect to these arrangements, the Group has
entered into put and call options with the holders of
these non-controlling interests. The put option gives the
minority shareholder the right to sell its non-controlling
interest to the Group. The call option gives the Group
the right to purchase the non-controlling interest. The
option exercise price is determined by a contractually
agreed formula that is based mainly on the future results
of the company involved.
The liability is initially stated at fair value. Subsequent
measurement is at amortized cost, using the effective
interest method. The value is determined by means of
the present value of the expected cash outflows to settle
the liability, based on projected results. The discount
rate used in discounting the expected cash outflows is
based on an interest rate that reflects the current market
assessment of the time value of money, taking into
account the expected settlement of these liabilities.
In line with the nature of the put option, the liability is
classified as short term, except for the part that can only
be exercised after one year. Changes in the value of
these liabilities (also including interest due to passage
of time), as well as differences upon settlement between
the actual cash outflow and the expected cash outflow,
are accounted for in net finance costs. The companies
acquired under these arrangements are fully
consolidated, with no recognition of a non-controlling
interest.
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21 statement of cash flows
The statement of cash flows has been prepared applying
the indirect method. Cash in the statement of cash flows
comprises cash and cash equivalents, as well as current
borrowings, because current borrowings form an
integral part of the Group's cash management.
Cash flows in foreign currencies have been translated,
in principle, at average exchange rates; certain material
(mainly financing) transactions are translated at the
exchange rate at the day of translation. Exchange
differences concerning cash items are shown separately
in the statement of cash flows. Income taxes paid/
received are included in the cash flow from operating
activities. Finance income received, finance expenses
paid, and dividends paid are included in the cash flow
from financing activities.
The purchase price of acquisitions paid, as well as the
selling price of disposed subsidiaries received, is
included in cash flow from investing activities. This
purchase price paid, as well as the selling price received,
is included in the statement of cash flows net of net cash
acquired or disposed of respectively. Changes in assets
and liabilities resulting from the acquisition and disposal
of subsidiaries are taken into account in the calculation
of the consolidated cash flows.
The majority of the items in the consolidated statement
of cash flows are individually cross-referenced to the
relevant notes to the consolidated statement of
comprehensive income and the balance sheet. For the
remainder of the material items, the reconciliation
between amounts as included in the consolidated
statement of cash flows and related amounts in the
statement of comprehensive income and the balance
sheet is shown in this note.
Currency differences on cash items are presented in the
line 'translation and currency gains'.
21.1 cash
cash
2017
2016
Cash and cash equivalents
326.3
385.8
Current borrowings
(712.5)
(438.6)
(386.2)
(52.8)
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21.2 trade and other receivables
trade and other receivables
2017
2016
Trade and other receivables as at January 1
4,174.2
3,435.7
Adjusted for:
Current part of loans and receivables
(69.9)
(6.7)
Deferred receipts relating to disposed
Group companies
-
0.0
Interest receivable
0.0
(0.1)
Operating working capital assets as at
January 1
4,104.3
3,428.9
Acquisition of subsidiaries
173.0
347.0
Disposal of subsidiaries
-
(0.9)
Translation gains
(147.5)
(37.1)
Statement of cash flows
447.9
366.4
Operating working capital assets as at
December 31
4,577.7
4,104.3
Adjusted for:
Current part of CICE receivable
98.7
67.4
Current part of other loans and receivables
3.6
2.5
Interest receivable
0.0
0.0
Balance as at December 31
4,680.0
4,174.2
21.3 trade and other payables
trade and other payables
2017
2016
Trade and other payables as at January 1
3,397.5
2,811.9
Adjusted for:
Interest payable
(5.3)
(4.4)
Operating working capital liabilities as at
January 1
3,392.2
2,807.5
Acquisition of subsidiaries
121.8
423.4
Disposal of subsidiaries
-
(0.3)
Translation losses
(98.4)
(35.3)
Statement of cash flows
272.7
196.9
Operating working capital liabilities as at
December 31
3,688.3
3,392.2
Adjusted for:
Interest payable
6.0
5.3
Trade and other payables as at December 31
3,694.3
3,397.5
21.4 other items
other items
2017
2016
CICE receivable
(144.9)
(110.3)
Loans
2.4
1.9
Non-cash
(142.5)
(108.4)
Redemptions of CICE receivable
70.2
-
Statement of cash flows
(72.3)
(108.4)
For the CICE receivable, see note 16.1.2.
21.5 corporate income taxes paid
corporate income taxes paid
2017
2016
North America
2.7
(1.5)
Netherlands
26.7
27.7
France
43.0
38.7
Germany
15.0
(3.9)
Belgium & Luxembourg
27.9
3.2
Iberia
7.7
6.2
Italy
12.9
20.8
Other European countries
7.4
12.6
Rest of the world
13.4
23.6
Global businesses
1.3
4.7
Corporate
28.2
27.7
Total
186.2
159.8
Corporate income taxes paid in North America are
relatively low as a result of accumulated net operating
losses that are offset against taxable income.
Randstad Holding and its Dutch subsidiaries form a
fiscal unity for corporate income tax.
In Germany, the 2016 taxes paid were distorted due to
receipts from prior years. The 2017 taxes paid in Belgium
were impacted by payments related to 2016.
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21.6 free cash flow
Free cash flow comprises net cash from operating and
investing activities, excluding the acquisition and
disposal of subsidiaries/activities, of equity
investments, and of associates:
free cash flow
2017
2016
Net cash from operating activities
688.1
559.7
Net cash from investing activities
(457.4)
(675.8)
230.7
(116.1)
Acquisition of subsidiaries, equity
investments and associates
356.2
581.4
Dividend received associates
(1.3)
-
Disposal of subsidiaries and associates
-
(0.7)
Free cash flow
585.6
464.6
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22 subsidiaries
22.1 subsidiaries
Subsidiaries are companies controlled by Randstad
Holding nv. Control exists when Randstad is exposed to
or has rights to variable returns from its involvement
with subsidiary companies and has the ability to
influence those returns through its power over the
subsidiary, generally accompanying a shareholding of
more than 50% of the voting rights. Subsidiaries are
consolidated from the date that such control
commences until the date that it ceases.
Intragroup balances and intragroup transactions are
eliminated, as well as any unrealized gains from these
transactions. Unrealized losses from intragroup
transactions are also eliminated, unless there is
evidence of impairment of the assets transferred.
Intercompany transactions take place on an arm's
length basis.
22.2 financial statements of group
companies
Upon translation of foreign activities, the assets and
liabilities of operations in currencies other than the euro,
including goodwill and fair-value adjustments arising on
consolidation, are translated into euros at the foreign
exchange rates at the balance sheet date. The income
statements of these operations in currencies other than
the euro are translated into euros at average exchange
rates.
Upon the acquisition of a subsidiary that has a currency
other than the euro, balance sheet items are translated
into euros at the foreign exchange rates at the
acquisition date.
22.3 net investment in subsidiaries that
have a currency other than the euro
The net investment in subsidiaries that have a currency
other than the euro includes the participation in the net
assets of these subsidiaries, and, if applicable, loans to
these subsidiaries, settlement of which is neither
planned nor expected to occur in the foreseeable future.
Translation differences that occur upon consolidation,
relating to the translation of the net investment in
subsidiaries that have a currency other than the euro,
are recognized in other comprehensive income and
presented in the (foreign currency) translation reserve,
a separate component within equity, as are translation
differences of financial liabilities designated as hedges
of such investments (net investment hedge), to the
extent that the hedge is effective. The gain or loss
relating to the ineffective portion is recognized
immediately in net finance costs.
If the operation is a non-wholly-owned subsidiary, then
the relevant proportionate share of the translation
differences is allocated to the non-controlling interests.
Whenever a foreign operation is disposed of, these
translation differences are released or charged to the
statement of comprehensive income as part of the gain
or loss on disposal.
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22.4 overview of selected subsidiaries, as per december 31, 20171
north america
• Randstad North America Inc, United States
• Randstad Professionals US LLC, United States
• RiseSmart Inc., United States
• Monster Worldwide Inc., United States
• Ausy North America Inc., United States
• Randstad Intérim Inc., Canada
the netherlands
• Randstad Nederland bv
• Tempo-Team Group bv
• Yacht Group Nederland bv
• Randstad Sourceright International bv
• Randstad Sourceright EMEA bv
• Monster Worldwide Netherlands bv
france
• Randstad SAS
• Ausy SAS
• Atoll SASU
• Monster Worldwide SAS
germany
• Randstad Deutschland GmbH & Co KG2
• Randstad Automotive GmbH & Co KG2
• Tempo-Team Personaldienstleistungen GmbH
• GULP Information Services GmbH
• GULP Solution Services GmbH & Co KG2
• Pentasys AG
• Elan-Ausy GmbH
• Monster Worldwide Deutschland GmbH
• eSolve AG
belgium & luxembourg
• Randstad Belgium nv
• Tempo-Team nv, Belgium
• Ausy Belgium nv
• Randstad Interim sa, Luxembourg
iberia
• Randstad Empleo, Empresa De Trabajo Temporal S.A.
Sociedad Unipersonal, Spain
• Randstad Recursos Humanos, Empresa de Trabalho
Temporario S.A., Portugal
italy
• Randstad Italia SPA, Italy
other european countries
• Randstad Austria GmbH
• Randstad sro, Czech Republic
• Randstad A/S, Denmark
• Randstad AE, Greece
• Randstad Hungary Kft, Hungary
• Randstad Ireland Operations Limited, Ireland
• Randstad Norway AS, Norway
• Randstad Polska Sp. z.o.o., Poland
• Randstad Romania Srl, Romania
• Randstad AB, Sweden
• Proffice AB, Sweden
• Randstad Schweiz AG, Switzerland
• Randstad Work Solutions Istihdam ve İnsan Kaynakları
Ltd. Şti., Turkey
• Randstad CPE Limited, United Kingdom
• Randstad Financial & Professional Limited, United Kingdom
• Randstad Public Services Limited, United Kingdom
• Randstad Sourceright Limited, United Kingdom
• Randstad Solutions Limited, United Kingdom
• Monster Worldwide Limited, United Kingdom
rest of the world
• Sesa Internacional S.A., Argentina
• Randstad Pty Ltd, Australia
• Randstad Brasil Recursos Humanos Ltda, Brazil
• Randstad Chile S.A., Chile
• Talent Shanghai Co. Ltd, China
• Randstad Hong Kong Limited, Hong Kong
• Randstad India Private Ltd, India
• Randstad KK, Japan
• Careo KK, Japan
• Randstad Sourceright Sdn. Bhd., Malaysia
• Randstad Mexico S. de R.L. de CV, Mexico
• Randstad Limited, New Zealand
• Randstad (PTE) Limited, Singapore
• Randstad Uruguay, Uruguay
other subsidiaries
• Randstad Holding Nederland bv, the Netherlands
• Randstad Finance GmbH, Switzerland
• Randstad FTC Pte Limited, Singapore
1 A list of all subsidiaries has been filed at the Chamber of Commerce in Amsterdam ('Kamer van Koophandel', Amsterdam; Chamber of Commerce number 33216172). Randstad
Holding nv has, directly or indirectly, a 100% interest in all subsidiaries (by way of legal ownership of the shares or by way of economic ownership of the shares (put-call
option arrangements) for a limited number of companies), unless stated otherwise.
2 The fully consolidated German subsidiaries mentioned above exercise simplification options in accordance with Article 264.b of the German Commercial Code ('HGB').
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23 share-based
compensations
The company has various share-based compensation
arrangements that are settled in ordinary shares. The fair
value of these share-based compensations, calculated
on grant date, is based on valuation models, taking into
account relevant market conditions and non-vesting
conditions. The fair value is included in personnel
expenses in the vesting period during which the
expected employee services are received. The same
amount is credited to shareholders’ equity.
At each balance sheet date, the company reassesses its
estimates of the non-market vesting conditions under
these share-based compensation arrangements. The
impact of the revision on original estimates with respect
to the past vesting period, if any, is recognized in
personnel expenses immediately, with a corresponding
adjustment to shareholders' equity.
Within the Group, a number of share-based
compensation arrangements are in effect: performance
share plans for Executive Board members, senior
management, an advisory board share plan, and a share
purchase plan for all corporate employees.
The actual annual grant of performance shares will, in
principle, not exceed 1% of the ordinary issued capital.
However, depending on the realization of related
performance targets and the company's actual share
price, the number of shares to be issued in relation to
vesting of the performance shares might in a certain
year exceed the 1% limit.
23.1 performance share plans
23.1.1 executive board performance share
plan
As from 2007, conditional performance shares have
been granted annually to the members of the Executive
Board. The plan has a term of three years. The number
of shares to vest depends on the company's TSR
performance compared to a peer group of nine
companies (2017: 18 peers) measured over a three-year
period starting on January 1 of the year of grant. As of
2013, the number of shares to vest also depends on
achieving certain sustainability performance targets.
All performance share plans are equity-settled. The fair
value is determined as at the date of each grant, based
on a Monte Carlo simulation model.
Volatility of the shares of the peer companies, as well as
the pair-wise correlation between all peer shares, is
estimated on the basis of historical daily prices over
three years. Estimated dividends of the peer companies
are based on historical dividends.
The fair value is charged to the income statement during
the vesting period, based on the on-target awards of the
TSR part of each plan and on the expected outcome of
the sustainability performance targets.
At each balance sheet date, the non-market conditions
(attrition and sustainability performance) are
reassessed; any adjustment is charged to the income
statement. As of 2013, the company uses treasury
shares to allocate vested shares.
The shares yet to be vested of a Board member who
resigns from the Group within the three-year vesting
period will, in principle, be forfeited.
23.1.2 senior management performance
share plan
As from 2007, conditional performance shares have also
been granted to a limited group of senior management
on terms and conditions that are identical to those of the
Executive Board, except for the fact that, for the years
2013 and 2014, the number of shares to vest solely
depends on the company's TSR performance.
The performance shares 2014 of Executive Board and
senior management vested in early 2017, based on
relative TSR performance and reaching certain
sustainability targets of the company, resulting in
1,107,446 shares being vested (share price at allocation
date of € 57.00), compared to an on-target award of
740,231 shares.
The expenses charged to the 2017 income statement
amount to € 25.0 million (2016: € 25.6 million).
23.1.3 retention performance share plan
In 2017, conditional performance shares have been
granted to certain senior management as part of a
retention plan. These shares will vest based on
performance during the vesting period from the year
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2017 until 2019, 2017 until 2020 and 2017 until 2021. The
performance conditions are non market conditions and
possible adjustments due to the yearly assessment of
the conditional performance are charged to the income
statement.
The expenses charged to the 2017 income statement
amount to € 1.0 million.
23.1.4 advisory board share plan
Members of the Advisory Board are granted conditional
shares on an annual basis until 2016. The plan has a term
of three years, and vesting of shares only depends on
rendering of employee services during the vesting
period. The fair value is charged to the income
statement during the vesting period.
parameters used for fair-value determination
2017
2016
2015
Average share price at grant date
€ 55.89
€ 47.20
€ 52.88
Expected volatility, based on
historical prices over the three-year
period to the valuation date
30.0%
28.0%
26.0%
Expected dividends
3.4%
2.3%
2.3%
Risk-free interest rate (yield on Dutch
government bonds)
0.0%
(0.2%)
0.1%
The Advisory Board share plan 2014 vested in early 2017,
resulting in 10,882 shares being vested (share price at
allocation date of € 57,00), compared to an on-target
award of 10,882 shares.
The expenses charged to the 2017 income statement
amount to € 0.2 million (2016: € 0.5 million).
details of all (performance) share plans
year of grant
number of shares (x 1,000) on target
average fair value at grant date per
share (in €)
january 1, 2017
granted
forfeitures
Vested in 2017
december 31, 2017
2014
751
-
-
(751)
-
29.83
2015
470
-
(26)
-
444
61.07
2016
580
-
(55)
-
525
43.26
2017
-
621
(35)
0
586
50.44
Total
1,801
621
(116)
(751)
1,555
23.2 performance stock option plans
From 2007 to 2012, Executive Board members were
granted stock options annually conditional on
performance; as of 2008 up to 2012, the options had an
exercise price equal to the average trading price of the
Randstad shares during three business days before
grant date. The options have a term of seven years, and
are only exercisable after a period of three years from
the date of grant.
On exercise of options, the company issues new shares.
Since December 31, 2014, all stock options under these
plans have been vested. For an overview of performance
stock option plans, see note 24.2.
23.3 share purchase plan for corporate
employees
Under the share purchase plan, participating corporate
employees may purchase shares through Stichting
Randstad Optiefonds twice a year. The maximum
amount to be spent within the plan is set annually at 5%
of the participant's annual salary. Employees receive a
number of bonus shares equal to 50% of the number of
shares purchased; these bonus shares vest over a period
of six months, only if employees hold on to the
purchased shares for the same period of six months (on
condition that they are still employed by the Group). The
bonus is expensed by the company over the vesting
period (2017: € 6.2 million; 2016: € 5.2 million). In 2017,
a total of 118,990 (2016: 108,812) bonus shares were
allocated to employees.
23.4 executive board share matching
plan
As of 2017, 25% of the net annual bonus of the Executive
Board will be paid out in shares. After 3 years, these
shares will be matched 1:1 subject to a sustainable
performance of the Company and at the discretion of
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other notes to the consolidated financial statements.
the Supervisory Board. Executive Board members are
allowed to voluntarily convert an additional 25% of the
net annual bonus with the same matching principles.
The expenses recorded for the matching of shares
amount to € 0.1 million.
23.5 total share-based compensations
2017
2016
Performance share plan
25.0
25.6
Retention performance share plan
1.0
-
Advisory Board share plan
0.2
0.5
Share purchase plan
6.2
5.2
Share matching plan
0.1
-
32.5
31.3
24 related-party
transactions
24.1 key management
The members of the Executive Board and Supervisory
Board are considered the key management of the
Group.
24.2 remuneration of the members of
the executive board
The totals of the remuneration of the members of the
Executive Board are included in the income statement.
Leo Lindelauf resigned as a Board member on April 2,
2015. After resigning from the Board, Leo Lindelauf
continued to perform services for the company. The
associated costs in 2017 amounted to € 57,000
(2016: € 238,000).
The expenses for performance shares refer to the fair
value of share-based payments charged to the income
statement for the years 2017 and 2016 respectively.
In the column 'Other benefits/expenses', special wage
taxes of € 157,000 (2016: € 149,000) are included,
relating to the salary of François Béharel.
The company has not issued any loans, commitments to
provide loans, or guarantees to Executive Board
members. Pension changes related to Dutch-based
Board members include compensation for the limitation
of accrual of pension rights in 2017 and 2016.
executive board remuneration
x € 1,000
fixed compensation
variable compensation
other benefits/ expenses
total
base salary
pension charge
short-term bonus
share-based payments
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
J.W. van den Broek
1,000
1,000
270
270
670
650
1,270
1,096
37
37
3,247
3,053
R.J. van de Kraats
724
710
196
192
485
462
939
842
36
35
2,380
2,241
F. Béharel
636
624
172
168
426
406
825
739
301
299
2,360
2,236
L. Galipeau
717
717
194
194
480
466
825
739
104
80
2,320
2,196
C. Heutink
636
624
172
168
426
406
825
739
29
28
2,088
1,965
Total
3,713
3,675
1,004
992
2,487
2,390
4,684
4,155
507
479
12,395
11,691
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number of performance stock options outstanding in 2017
year of granting
january 1, 2017 exercised in 2017
share price at
exercise
december 31,
2017
exercise price
end of exercise
period
average fair value
at grant date
J.W. van den Broek
2010
7,083
(7,083)
57.28
-
2011
12,614
12,614
€ 39.16
February
2018
€ 21.00
2012
15,382
15,382
€ 28.11
February
2019
€ 11.31
R.J. van de Kraats
2010
4,031
(4,031)
55.95
-
2011
14,359
(14,359)
56.24
-
2012
17,511
(6,000)
52.29
11,511
€ 28.11
February
2019
€ 11.31
Total
70,980
(31,473)
39,507
number of performance shares outstanding in 2017
year of award
january 1, 2017
number of shares on
target 2017
performance
adjustment at vesting
2017 vested in february 2017
december 31, 2017
Performance shares
J.W. van den Broek
2014
25,537
12,009
(37,546)
-
2015
30,099
30,099
2016
21,486
21,486
2017
22,066
22,066
R.J. van de Kraats
2014
21,475
10,099
(31,574)
-
2015
23,060
23,060
2016
15,260
15,260
2017
15,986
15,986
F. Béharel
2014
18,864
8,872
(27,736)
-
2015
20,258
20,258
2016
13,405
13,405
2017
14,043
14,043
L. Galipeau
2014
18,864
8,872
(27,736)
-
2015
20,258
20,258
2016
13,405
13,405
2017
14,043
14,043
C. Heutink
2014
18,864
8,872
(27,736)
-
2015
20,258
20,258
2016
13,405
13,405
2017
14,043
14,043
Total
294,498
80,181
48,724
(152,328)
271,075
Performance shares of former
Board members
L.J.M.V. Lindelauf
2014
9,433
-
4,434
(13,867)
-
Total
9,433
-
4,434
(13,867)
-
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The performance shares 2014 vested in early 2017,
based on relative TSR performance of the company and
reaching certain sustainability targets over the period
January 1, 2014 − December 31, 2016, resulting in an
overall vesting of 147% of the on-target award (share
price at allocation date of € 57.00).
Final allocation after vesting of conditional shares
awarded in 2015, 2016, and 2017 will take place in
February 2018, 2019, and 2020 respectively.
For the conditions and criteria governing the granting
and exercise of stock options and performance shares,
see note 23.1.
number of ordinary shares in randstad holding nv held by executive board members
as at december 31, 2017
locked up
total
unrestricted shares
number
until
J.W. van den Broek
96,405
59,580
17,814
February 2018
19,011
February 2019
R.J. van de Kraats
39,410
3,144
20,279
February 2018
15,987
February 2019
F. Béharel1
83,348
30,468
30,791
February 2018
22,089
February 2019
L. Galipeau
28,702
-
16,327
February 2018
12,375
February 2019
C. Heutink
14,044
-
14,044
February 2019
1 Due to French tax regulations, the number of shares locked up for François Béharel are relatively high.
24.3 remuneration of the members of
the supervisory board
Remuneration of the members of the Supervisory Board
is included in the income statement.
supervisory board remuneration
2017
2016
Current board members
W. Dekker, Chairman
128,500
128,500
J. Winter, Vice Chairman
107,500
107,500
B. Borra
89,500
94,000
F. Dorjee
88,500
88,500
H.M.E.V. Giscard d'Estaing
88,500
88,500
G. Kampouri Monnas
91,500
91,500
R. Provoost
90,000
88,500
Total
684,000
687,000
As members of the Supervisory Board of the Dutch sub-
holding Randstad Holding Nederland bv, Jan Hovers and
Willem Vermeend, both former members of the
Supervisory Board, received an annual allowance of
€ 12,000 in 2017 and 2016. Henri Giscard d'Estaing holds
450 ordinary shares in Randstad Holding nv as at
December 31, 2017 and 2016.
The company has not issued any loans, commitments to
provide loans, or guarantees to members of the
Supervisory Board.
24.4 other related-party transactions
The founder of the Randstad Group has an interest in a
legal entity, which, based on the ‘Wet financieel
toezicht’ (Act on Financial Supervision), is registered as
a shareholder in Randstad Holding nv in the 30% − 40%
category. There were no transactions with this related
party, other than the rental of a ship, Clipper Stad
Amsterdam, for promotional activities, at an annual rent
of approximately € 2.0 million (2016: € 1.9 million).
See note 25.2 'Employee benefit obligations' for
transactions with company pension funds through
which certain pension schemes are operated.
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25 employee benefit obligations
defined benefit pension plans
other post-
employment benefits
other long-term
employee benefits
total
obligation
plan assets
net
Balance at January 1, 2017
211.6
(120.1)
91.5
9.7
31.1
132.3
Movements in 2017
Acquisition of subsidiaries
116.0
(113.9)
2.1
-
0.8
2.9
Current service costs, total
23.9
-
23.9
0.7
43.5
68.1
Contributions, employees
-
(8.6)
(8.6)
-
-
(8.6)
Contributions, employers
-
(12.3)
(12.3)
-
-
(12.3)
Withdrawals/benefits paid
(9.6)
8.9
(0.7)
(1.4)
(25.4)
(27.5)
Total amount in statement of cash flows
14.3
(12.0)
2.3
(0.7)
18.1
19.7
Remeasurement results
(23.1)
(3.3)
(26.4)
0.1
-
(26.3)
Interest due to passage of time, net
4.7
(3.6)
1.1
0.1
0.2
1.4
Translation differences
(6.4)
5.3
(1.1)
(0.2)
(0.7)
(2.0)
Balance at December 31, 2017
317.1
(247.6)
69.5
9.0
49.5
128.0
Non-current
317.1
(247.6)
69.5
8.8
36.4
114.7
Current
-
-
-
0.2
13.1
13.3
Balance at December 31, 2017
317.1
(247.6)
69.5
9.0
49.5
128.0
Balance at January 1, 2016
Non-current
184.6
(106.8)
77.8
3.8
13.3
94.9
Current
-
-
-
0.4
12.0
12.4
184.6
(106.8)
77.8
4.2
25.3
107.3
Movements in 2016
Acquisition of subsidiaries
0.1
-
0.1
5.7
-
5.8
Current service costs, total
22.9
-
22.9
0.3
50.7
73.9
Contributions, employees
-
(7.5)
(7.5)
-
-
(7.5)
Contributions, employers
-
(11.7)
(11.7)
-
-
(11.7)
Withdrawals/benefits paid
(7.4)
6.2
(1.2)
(0.6)
(45.2)
(47.0)
Total amount in statement of cash flows
15.5
(13.0)
2.5
(0.3)
5.5
7.7
Remeasurement results
7.3
1.8
9.1
-
-
9.1
Interest due to passage of time, net
3.2
(1.5)
1.7
0.1
-
1.8
Translation differences
0.9
(0.6)
0.3
-
0.3
0.6
Balance at December 31, 2016
211.6
(120.1)
91.5
9.7
31.1
132.3
Non-current
211.6
(120.1)
91.5
9.5
18.1
119.1
Current
-
-
-
0.2
13.0
13.2
Balance at December 31, 2016
211.6
(120.1)
91.5
9.7
31.1
132.3
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25.1 employee benefit obligations
The discount rates used to calculate employee benefit
obligations are in the following ranges:
discount rates (employee benefit obligations)
2017
2016
Defined benefit pension plans
0.5%-1.9%
0.5%-1.9%
Other post-employment benefits
0.8%-3.7%
1.9%-2.0%
Other long-term employee benefits
(0.3)%-3.0% (0.2)%-3.0%
The obligations regarding other post-employment
benefits and other long-term employee benefits are
unfunded.
25.2 pensions
defined benefit pension plan schemes
2017
2016
Defined benefit plan, corporate
employees in Belgium
23.9
27.9
Defined benefit plan, corporate
employees in France
23.2
41.2
Defined benefit plan, corporate
employees in Germany
8.9
9.7
Defined benefit plan, staffing and
corporate employees in Switzerland
5.2
7.5
Defined benefit plan, corporate
employees in Japan
4.6
5.2
Defined benefit plan, corporate
employees in the Netherlands
3.7
-
69.5
91.5
The Group has various pension schemes, in accordance
with local conditions and practices in the countries in
which it operates. In some countries, such pension
schemes are operated through a company pension
fund. Most of the pension schemes are defined
contribution plans, which are funded through payments
to independent entities. For these schemes, the Group's
obligation is limited to the payment of these annual
contributions. The contributions constitute net periodic
costs for the year in which they are due and are included
in personnel expenses and/or costs of services.
A few pension schemes are defined benefit plans. The
liability recognized in the balance sheet is the present
value of the defined benefit obligation less the fair value
of plan assets. Independent actuaries calculate the
defined benefit obligations based on factors such as
age, years of service, and compensation (projected unit
credit method).
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate
bonds denominated in the currency in which the
benefits will be paid, and with terms to maturity that
approximate the term when the related pension liability
is due.
Current service costs are recognized in personnel
expenses and/or cost of services and reflect the
increase in the defined benefit obligation resulting from
employee service in the current year.
Past service costs are recognized immediately in
personnel expenses and/or cost of services.
Remeasurement gains and losses of the net defined
benefit obligation arising from experience adjustments
and changes in actuarial assumptions are recognized in
other comprehensive income.
The net interest expense on the net defined benefit
liability is determined by applying the discount rate used
to measure the defined benefit obligation at the
beginning of the year to the then net defined benefit
liability. Net interest expense is recognized in net
finance costs.
In the Netherlands and Belgium, three pension schemes
are operated through separate and independent
company pension funds. For the Netherlands these
pension funds are 'Stichting Pensioenfonds Randstad'
for corporate employees and 'Stichting Pensioenfonds
Flexsecurity' for staffing employees employed by Dutch
Group companies. Both funds operate defined
contribution pension plans. Stichting Pensioenfonds
Randstad operates a closed pension plan. In 2017, the
transactions with these funds amounted to € 0.0 million
(2016: € 0.2 million) and € 52.9 million ((€ 50.7 million)
respectively. The balances as at December 31, 2017
amounted to zero (2016: zero) and € 4.2 million (2016:
€ 3.7 million) payable respectively. For Belgium, the
pension fund is 'Pensioenfonds Belgische
werkmaatschappijen van Randstad OFP' for corporate
employees employed by Belgian Group companies. The
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fund operates a defined benefit pension plan. In 2017,
transactions with this fund amounted to
€ 5.2 million (2016 € 3.8 million). The balance as at
December 31, 2017 amounted to
€ 0.5 million payable (2016: € 0.4 million payable).
The defined benefit pension plans in France and Belgium
are final-salary pension plans, which provide benefits to
(prior) employees in the form of a guaranteed level of
pension payable for life or lump sums upon retirement.
In Belgium, the pension entitlement of corporate
employees is based on the average pensionable salary
in the last three years before retirement and is a pension
payable for life upon retirement. The employer's
contribution is capped at a maximum of 5% of salaries.
The plan is organized through a fund that is legally
separated from the company. The board of this pension
fund is required to act in the interest of the fund and of
all relevant stakeholders in the scheme; the investment
policy with regard to the assets of the fund is also the
responsibility of the board.
In France, the plan is in addition to state plans. The
company is legally required to pay lump sums to
employees upon retirement. The amounts are based on
the number of years of service in the company and on
the base salary according to the collective bargaining
agreement in force. The scheme covers all corporate
employees within the company. In 2017 a change in
definition of turnover rate resulted in a remeasurement
result of € 24.6 million.
In the Netherlands the defined benefit pension plan is a
closed pension plan (operated through an insurance
company) and the net liability is basically the difference
between the expected future surplus interest sharing
that will flow to the Group and a yearly guarantee
payment based on the pension obligation towards
employees.
breakdown of obligations for defined benefit pension
plans
2017
2016
Present value of funded obligations
317.1
211.6
Present value of unfunded obligations
-
-
Total present value of obligations
317.1
211.6
Fair value of plan assets
(247.6)
(120.1)
Liability in the balance sheet
69.5
91.5
major categories of plan assets
as a % of fair value of total plan assets
2017
2016
Cash
0.8%
2.4%
Bonds
33.5%
35.1%
Equity instruments
42.4%
39.6%
Real estate
7.9%
7.9%
Other
15.4%
15.0%
100.0%
100.0%
The actual return on plan assets was € 5.8 million
positive (2016: € 0.3 million negative).
principal actuarial assumptions used for defined benefit
pension plans
2017
2016
Discount rate
0.5%-1.9%
0.5%-1.9%
Expected salary increases
0.0%-3.3%
0.0%-3.3%
Expected pension increases
0.0%-1.8%
0.0%-1.8%
average life expectancy1
in years
2017
2016
Male
19.8-22.5
18.4 - 22.5
Female
23.7-26.3
22.6 - 26.3
1 Average life expectancy of an individual retiring at the age of 65 on the balance
sheet date.
The assumptions regarding future mortality are based
on published statistics and mortality tables in each
territory.
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The Group expects the 2018 contributions to be paid for
defined benefit plans to be approximately € 14.1 million
(expectation 2017: € 12.8 million), excluding the impact
of acquisitions and disposals.
risks
The most significant risks related to defined benefit
plans are related to:
• Asset volatility: if the plan assets underperform, the
yield on (high-quality) corporate bonds, which is the
base for setting the discount rate in calculating the
plan liabilities, will create a deficit;
• Interest/yield volatility: a decrease will result in an
increase in the net plan liabilities;
• Salary volatility: future (expected) salaries are being
used in the calculation of the plan liabilities; higher
than expected salary increases will result in higher
liabilities;
• Life expectancy: in the calculation of the plan liabilities,
mortality tables are being used, indicating the life
expectancy of the participants. If life expectancy
increases, the plan liabilities will also increase.
sensitivity
With respect to the provision for pensions, a change in
the interest rate of 1 percentage point, with all other
variables held constant, would result in a deviation in the
range of € 5 to € 6 million (2016: € 11 to € 15 million).
25.3 other post-employment benefits
Other post-employment benefit plans are defined
benefit plans and follow the same accounting treatment
as defined benefit pension plans. Independent actuaries
calculate the defined benefit obligations based on
factors such as age, years of service, and compensation
(projected unit credit method). These plans mainly
consist of state-driven plans in Italy and India, and post-
employment health benefits in the USA.
Remeasurements of the obligation − comprising gains
and losses arising from experience adjustments and
changes in actuarial assumptions − are recognized in
other comprehensive income.
25.4 other long-term employee
benefits
In accordance with applicable legal requirements, the
Group recognizes liabilities for several other long-term
employee benefit plans, such as sickness- and long-term
disability- related schemes and long-service leave plans.
These liabilities are based on calculations made by
independent actuaries based on factors such as age,
years of service, expected sickness duration, and
compensation (the 'projected unit credit method').
Remeasurement gains and losses related to these plans
are recognized in personnel expenses and/or cost of
services in the year in which they occur.
26 number of employees
(average)
2017
2016
Candidates
668,800
626,300
Corporate employees
37,930
32,280
706,730
658,580
number of employees by segment
Candidates
Corporate
employees
2017
2016
2017
2016
North America
100,900
101,700
5,720
5,410
Netherlands
81,800
82,500
4,230
4,170
France
86,600
78,200
4,140
3,520
Germany
49,500
47,000
2,740
2,610
Belgium & Luxembourg
45,600
41,900
2,070
1,900
Iberia
68,400
63,200
2,030
1,870
Italy
47,400
30,400
2,090
1,680
Other European
countries
66,600
62,800
3,810
3,640
Rest of the world
111,300
109,900
5,000
4,980
Global businesses
10,700
8,700
5,880
2,300
Corporate
-
-
220
200
668,800
626,300
37,930
32,280
27 commitments
2017
2016
Commitments less than 1 year
256.5
263.1
Commitments more than 1 year, less
than 5 years
399.6
421.9
Commitments more than 5 years
62.9
93.0
719.0
778.0
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Commitments comprise, almost exclusively, lease
contracts for branches and lease contracts for IT
equipment and automobiles.
No guarantees have been issued other than those
relating to commitments regarding rent and leases, and
those relating to liabilities that are included in the
balance sheet.
28 auditors' fees
The following auditors' fees were expensed in the
income statement in the reporting period:
auditors' fees
2017
2016
Audit of the financial statements1
3.2
3.0
Audit of the financial statements of
subsidiaries by other audit firms
1.6
1.5
Subtotal for audit of the financial
statements2
4.8
4.5
Other audit procedures3
0.2
0.1
Tax and other services3
-
0.3
Total
5.0
4.9
1 The fees listed above relate to the procedures applied to the company and its
consolidated Group entities by Deloitte Accountants B.V. as the external auditor
referred to in Section 1 (1) of the Dutch Accounting Firms Oversight Act (Wta) as
well as by the Deloitte network (€ 0.8 million and € 2.4 million respectively (2016:
€ 0.8 million and € 2.2 million)).
2 Including the audit fees with respect to the local statutory financial statements.
3 The fees listed above relate to the procedures applied to the company and its
consolidated Group entities by Deloitte Accountants B.V. as the external auditor
referred to in Section 1(1) of the Dutch Accounting Firms Oversight Act (Wta)
(€ 0.1 million), as well as by the Deloitte network.
29 events after balance
sheet date
On January 31, 2018 Monster Worldwide, Inc.
announced that it has signed an agreement to sell its
Asian Pacific businesses. The transaction was closed on
February 8, 2018. The consideration received amounted
to approximately € 10 million.
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financial
statements.
(before profit appropriation for ordinary shares)
income statement
in millions of €
note
2017
2016
Revenue
2
289.2
249.8
Gross profit
289.2
249.8
Selling expenses
12.4
10.6
General and administrative expenses
73.9
71.3
Total operating expenses
86.3
81.9
Operating profit / (loss)
202.9
167.9
Finance income
54.4
45.9
Finance expenses
(152.2)
(134.5)
Net finance costs
(97.8)
(88.6)
Income / (loss) before taxes
105.1
79.3
Taxes on income
(36.1)
(26.3)
Income from subsidiaries after taxes
4
562.4
535.0
Net income
631.4
588.0
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statement of financial position at december 31
in millions of €
note
2017
2016
assets
Software
3
0.3
0.6
Intangible assets
0.3
0.6
Subsidiaries
4
7,712.5
7,465.6
Long-term loans receivable from subsidiaries
5
518.8
806.9
Financial fixed assets
8,231.3
8,272.5
Non-current assets
8,231.6
8,273.1
Receivables
6
732.1
91.4
Income tax receivable
-
14.2
Cash and cash equivalents
-
15.9
Current assets
732.1
121.5
Total assets
8,963.7
8,394.6
equity and liabilities
Issued capital
25.9
25.8
Share premium
2,284.3
2,270.7
Legal reserves
100.9
257.8
Other reserves
1,208.5
997.8
Net income for the year
631.4
588.0
Shareholders' equity
7
4,251.0
4,140.1
Non-current liabilities/borrowings
8
2,009.2
2,298.2
Borrowings
8
1,111.3
252.4
Trade and other payables
9
1,575.6
1,703.9
Income tax payable
16.6
-
Current liabilities
2,703.5
1,956.3
Total equity and liabilities
8,963.7
8,394.6
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notes to the
company
financial statements.
1 accounting policies for
the company financial
statements
The company financial statements of Randstad Holding
nv are prepared in accordance with the legal
requirements of Part 9, Book 2 of the Dutch Civil Code.
The company has made use of the possibility based on
Article 362, paragraph 8, Part 9, Book 2 of the Dutch Civil
Code to prepare company financial statements based
on the accounting policies used for the consolidated
financial statements.
The subsidiaries are presented in accordance with the
equity method.
Receivables are mainly receivables on subsidiaries. The
accounting policy on trade and other receivables is
included in note 3.2.1 of the notes to the consolidated
financial statements.
A summary of the significant accounting policies and a
summary of the critical accounting estimates,
assumptions and judgments are given in note 2 and
note 4 respectively of the notes to the consolidated
financial statements.
2 revenue
Revenue comprises charges to subsidiary companies
with regard to corporate expenses as well as royalty
charges.
These (royalty) charges are based on a percentage of
revenues of subsidiary companies.
3 software
software
2017
2016
Balance at January 1
0.6
1.1
Additions
0.3
-
Amortization
(0.6)
(0.5)
Balance at December 31
0.3
0.6
Cost
2.3
2.0
Accumulated amortization and impairment
(2.0)
(1.4)
Balance at December 31
0.3
0.6
Additional information with respect to software is given
in note 14 of the notes to the consolidated balance sheet.
4 subsidiaries
subsidiaries
2017
2016
Balance at January 1
7,465.6
6,415.9
Capital contributions
4.7
765.1
Dividend
(89.4)
(269.6)
Net income
562.4
535.0
Share-based compensations,
subsidiaries
(20.1)
(9.7)
IAS 19 effects, subsidiaries
17.6
(6.5)
Fair value adjustment on equity
investment
0.8
0.3
Disposal of non-controlling interest
-
(0.1)
Translation differences
(229.1)
35.2
Balance at December 31
7,712.5
7,465.6
See note 22.4 of the notes to the consolidated financial
statements for an overview of the selected subsidiaries.
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5 long-term loans
receivable from
subsidiaries
This mainly relates to various loans to subsidiaries that
are issued with maturity dates from July 2018 to July
2019. The average interest on all loans is 4.4% (2016:
5.6%). The current part of loans to subsidiaries is
included in receivables.
6 receivables
receivables
2017
2016
Receivables from subsidiaries
128.2
85.0
Current part of loans receivable from
subsidiary
600.0
-
Other receivables
3.9
6.4
732.1
91.4
7 shareholders' equity
Additional information is given in the consolidated
statement of changes in equity and in note 19 of the
notes to the consolidated financial statements.
7.1 legal reserves
Based on Dutch law, a legal reserve needs to be
established for currency translations, fair-value
adjustments, and capitalized costs of development of
software. The legal reserve cannot be used for dividend
distribution and is therefore restricted in usage.
legal reserves
2017
2016
Translation reserve
37.9
220.7
Developed software
61.3
36.2
Fair value reserve
1.7
0.9
100.9
257.8
Movements during 2017 relate to translation losses and
to the net balance of capitalization and amortization of
software developed in-house.
7.2 other reserves
'Other reserves' includes a reserve with respect to share-
based compensations to the amount of € 57.5 million
(2016: € 54.2 million).
8 borrowings
borrowings
2017
2016
Non-current borrowings comprising
drawings on the multi-currency
syndicated revolving credit facility
489.5
699.2
Promissory note
150.0
-
Non-current borrowings, payable to
subsidiaries
1,369.7
1,599.0
Non-current borrowings
2,009.2
2,298.2
Current borrowings
521.3
252.4
Current borrowings, payable to
subsidiaries
590.0
-
Current borrowings
1,111.3
252.4
Total borrowings
3,120.5
2,550.6
Total borrowings payable to subsidiaries consist of
various loans amounting to € 1,959.7 million (2016:
€ 1,599 million), maturing from December 31, 2018 to
April 6, 2027. The average interest rate on all loans is
5.3% (2016: 5.6%).
movements in non-current borrowings third parties
2017
2016
Balance at January 1
699.2
124.6
(Repayments of) / drawings on
syndicated loan
(145.2)
552.9
Issuance of promissory note
150.0
-
Amortization of transaction costs
1.6
2.2
Translation differences
(66.1)
19.5
Balance at December 31
639.5
699.2
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Additional information with respect to borrowings is
given in note 3.2 of the notes to the consolidated
balance sheet.
9 trade and other payables
trade and other payables
2017
2016
Trade payables
1.6
1.2
Payables to subsidiaries
1,557.6
1,686.6
Other taxes and social security
premiums
1.7
1.4
Wages, salaries and other personnel
costs
6.6
6.0
Accruals and deferred income
8.1
8.7
Balance at December 31
1,575.6
1,703.9
10 number of employees
(average)
In 2017, the company employed an average of 172
employees (2016: 160).
11 remuneration
See note 24 of the notes to the consolidated financial
statements.
12 related parties
All companies within the Group are considered to be
related parties. Also see notes 22, 23 and 24 of the notes
to the consolidated financial statements.
13 guarantees and
commitments
The company bears joint and several liability for
drawings by subsidiaries under the multi-currency
syndicated revolving credit facility and under bank
overdraft and guarantee facilities, to the amount of
€ 648 million (2016: € 562 million).
As at December 31, 2017, guarantees issued on behalf of
subsidiaries amounted to € 4.8 million (2016:
€ 7.4 million). Furthermore, in the normal course of
business, the company provides financial support to its
subsidiaries.
The company’s commitments for the period shorter
than one year amount to € 0.8 million (2016:
€ 0.7 million) and for the period between one and five
years to € 0.7 million (2016: € 1.2 million) with respect to
lease contracts for automobiles.
The company is part of fiscal unities for corporate
income taxes, as well as for value-added taxes. As a
consequence, the company bears joint and several
liability for the debts with respect to corporate income
taxes and value-added taxes of the fiscal unities. The
company settles corporate income taxes, in principle,
based on the results before taxes of the subsidiaries
belonging to the fiscal unity.
The company has issued joint and several liability
statements in accordance with Section 403, Part 9, Book
2 of the Dutch Civil Code for a limited number of its
Dutch subsidiary companies, mainly serving as sub-
holding companies.
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14 auditors' fees
Information with respect to auditors' fees is given in
note 28 of the notes to the consolidated financial
statements.
Diemen, the Netherlands, February 12, 2018
The Executive Board
Jacques van den Broek, Chair
Robert Jan van de Kraats, Vice-Chair
François Béharel
Linda Galipeau
Chris Heutink
The Supervisory Board
Wout Dekker, Chair
Jaap Winter, Vice-Chair
Barbara Borra
Frank Dorjee
Henri Giscard d'Estaing
Giovanna Kampouri Monnas
Rudy Provoost
 
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provisions in the articles of
association concerning
profit appropriation
The following is a summary of the most important
stipulations of Article 28 of the Articles of Association
concerning profit appropriation.
subsection 1.
Any such amounts from the profits as will be fixed by the
Executive Board with the approval of the Supervisory
Board will be allocated to reserves. As far as possible,
from the remaining profits (hereinafter also called the
total profits):
A dividend will first be distributed to the holders of
preference A shares on the amount paid on said shares,
of which the percentage will be equal to the average of
the statutory interest – in the event of a change in the
meantime to the respective percentages – during the
financial year for which the distribution is made. This
percentage will be increased by a surcharge fixed by the
Executive Board, subject to the approval of the
Supervisory Board, amounting to a maximum of three
percent (3%). If, in any year, the profit distribution on
preference A shares cannot be made or can only be
made partially, the overdue dividend on the shares will
be distributed in the subsequent years before any other
dividend distribution is made.
A dividend will subsequently be distributed per series to
holders of preference B shares (equal to the basic
percentage to be mentioned under b.2) of the sum of
the nominal amount and the amount in share premium
which was paid upon the first issue of the shares of said
series, which percentage will be increased upon said
issue by a surcharge, fixed by the Executive Board,
subject to approval of the Supervisory Board, of a
maximum of one hundred and seventy-five (175) base
points. If the share premium reserve has not shown the
same balance for the whole financial year, the dividend
shall be calculated on the time-weighted average
balance for that financial year.
The basic percentage referred to under b.1 will be the
arithmetic average of the effective yield on the
government bonds issued by the Kingdom of the
Netherlands with a term or remaining term of six to
seven years. For the first time on the date that the
preference B shares (of a series) have been outstanding
for seven years, and subsequently each period of seven
years after this, the basic percentage of the preference
B shares (of the series concerned) will be adjusted to the
yield then effective of the state loans referred to in the
above-mentioned provisions.
A dividend will be distributed per series of preference C
shares to holders thereof equal to the basic percentage
mentioned under b.4 increased with the increment
mentioned under b.4 calculated over the sum of the
nominal amount increased by the daily time weighted
average over the relevant financial year of the sum of the
share premium amount and the preference C shares
dividend reserve of said series. Notwithstanding the
preceding sentence the dividend on the preference C
shares for the period until the eighteenth day of
November two thousand and nineteen will be five
hundred eighty (580) basis points.
For the first time on the eighteenth day of November two
thousand nineteen and subsequently each period of
seven years after this, the basic percentage of the
preference C shares (of the series concerned) will be
adjusted to the average effective return on Dutch
government bonds with a (remaining) life of seven years.
The increment is to be determined by the Executive
Board with the approval of the Supervisory Board with a
minimum of fifty (50) basis points and a maximum of six
hundred and fifty (650) basis points, depending on the
market circumstances (as a function of, among other
things, illiquidity, perpetuality,
creditworthiness, subordination and tax treatment) at
that time and is subject to the approval of the meeting
of shareholders of the preference C shares or series
concerned, which approval requires unanimous votes of
the holders of the preference C shares present or
represented at such meeting.
The Executive Board is authorized, subject to the
approval of the Supervisory Board, to resolve that
dividend on the preference B shares or on the
preference C shares of any series shall not be distributed
but reserved instead in order to be distributed at a later
date following a resolution to this effect by the Executive
Board, subject to the approval of the Supervisory Board.
When it is resolved that dividend on the preference B
shares shall not be distributed but reserved then it shall
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also be resolved that dividend on the preference C
shares shall not be distributed but reserved and vice
versa.
If and insofar as the profit is not sufficient to fully make
the distribution referred to hereinbefore on preference
B shares and on preference C shares, the Executive
Board may resolve, subject to the approval of the
Supervisory Board, to make these distributions from the
freely distributable reserves, with the exception of the
share premium reserves referred to in Article 4,
paragraph 4 under b and c, preference A shares
dividend reserves, preference B shares dividend
reserves and preference C shares dividend reserves.
If and insofar as in any financial year no distribution can
be made, or it is resolved not to make a distribution on
preference B shares, from the profit realized in the
subsequent years after allocation to reserves and
reduction of the amounts accruing to holders of
preference A shares in accordance with the provisions
in paragraph 1 subparagraph a of Article 28, following a
resolution to that effect by the Executive Board, subject
to the approval of the Supervisory Board, such
distribution will be made to the holders of said
preference shares or reserved that the deficit will have
been fully made good before the provisions laid down
hereinbefore can be applied.
If and insofar as in any financial year no distribution can
be made, or it is resolved not to make a distribution on
preference C shares, from the profit realized in the
subsequent years after allocation to reserves and
reduction of the amounts accruing to holders of
preference A shares in accordance with the provisions
in paragraph 1 subparagraph a of Article 28, following a
resolution to that effect by the Executive Board subject
to the approval of the Supervisory Board, such
distribution will be made to the holders of said
preference shares or reserved as such that the deficit
will have been fully made good before the provisions
laid down hereinbefore can be applied. Such deficit will
be increased with the percentage referred to in
paragraph 1 under b.3 or under b.4 of this Article 28
calculated over the period the deficit occurred and the
moment the deficit has been made good.
If preference B shares or preference C shares have been
issued in the course of any financial year, the dividend
on the shares concerned for said financial year will be
reduced proportionately until the first day of issue.
subsection 2.
The balance then remaining will be available to the
General Meeting, subject to the proviso that (i) no
distribution will be made as long as not all the profit
distributions on the preference shares have been made
and the reserves are distributed on the preference
shares as referred to in this Article 28 and (ii) no further
distribution will be made on preference shares, nor will
any amounts be reserved for this purpose.
subsection 3.
The company may only make distributions to
shareholders from the profit susceptible to distribution
insofar as its common equity exceeds the amount of the
paid and claimed part of the capital increased by the
reserves to be kept by virtue of the law.
subsection 4.
Subject to the approval of the Supervisory Board, the
Executive Board may pass a resolution for distribution of
an interim dividend, to be deducted from the dividend
expected for the financial year concerned, if the
requirement of the preceding paragraph has been
fulfilled, as will be evident from an interim specification
of equity and all the distributions on preference B shares
and preference C shares have been made. Said
specification of equity will relate to the position of the
equity at the earliest on the first day of the third month
prior to the month in which the resolution for
distribution will be announced. It will be drawn up with
due observance of the valuation methods deemed
acceptable in society. The specification of equity will
include the amounts to be allocated to the reserves by
virtue of the law. It will be signed by the members of the
Executive Board. In the event that the signature(s) of one
or more of them should be lacking, the reason thereof
will be stated. The company will deposit the
specification of equity at the office of the Trade Register
within eight days after the date on which the resolution
for distribution will be announced. A resolution for
distribution of an interim dividend may be limited to a
distribution of an interim dividend exclusively to
shareholders of a particular class, without prejudice to
the rights of shareholders of other classes.
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subsection 5.
Resolutions for the complete or partial cancellation of
reserves as stated in paragraph 1 of this Article may only
be passed by the General Meeting on a proposal of the
Executive Board approved by the Supervisory Board,
with the exception of resolutions in respect of: (i)
distributions from reserved dividend on preference B
shares and on preference C shares, which shall be
resolved upon by the Executive Board subject to the
approval of the Supervisory Board; and (ii) annual
distributions of twenty per cent (20%) of the preference
C shares share premium reserve on preference C shares,
which may be increased with an additional amount at
the expense of the general reserves, such amount as to
be determined at the time of issuance, which
distributions may be resolved upon by the Executive
Board, subject to the approval of the Supervisory Board,
once the preference C shares (of a series) have been
outstanding for four years. If in any financial year a
distribution as referred to under (ii) does not occur or
does not wholly occur, such distribution may take place
in a subsequent year, provided that in any financial year
not more than thirty percent (30%) may be distributed.
When it is resolved that distributions shall be made from
the preference B shares dividend reserve then it shall
also be resolved that distributions shall be made from
the preference C shares dividend reserve and vice versa.
Resolutions of the General Meeting for the complete or
partial cancellation of a share premium reserve will
require the prior approval of the meeting of holders of
shares of the class and series concerned, without
prejudice to the provisions in Article 4, paragraph 5,
under b.1. Only holders of ordinary shares will be entitled
to distributions deducted from allocations to reserves
other than those mentioned in the preceding sentence.
However, without prejudice to the amounts that would
accrue to holders of preference B shares or holders of
preference C shares, in accordance with the provisions
in Article 28, paragraph 1b.4. and Article 34, paragraph
4.6., resolutions for the complete or partial cancellation
of reserves as stated in paragraph 1 of this Article may
only be passed by the General Meeting on a proposal of
the Executive Board approved by the Supervisory Board,
with the exception of distributions from reserved
dividend on preference B shares, which shall be
resolved upon by the Executive Board subject to the
approval of the Supervisory Board. Resolutions of the
General Meeting for the complete or partial cancellation
of a share premium reserve as stated in Article 4,
paragraph 4.b. will require the prior approval of the
meeting of holders of shares of the class and series
concerned, without prejudice to the provisions in Article
4, paragraph 5, under b.1. Only holders of ordinary
shares will be entitled to distributions deducted from
allocations to reserves other than those mentioned in
the preceding sentence. However, without prejudice to
the amounts that would accrue to holders of preference
B shares in accordance with the provisions in Article 28,
paragraph 1b.4. and Article 34, paragraph 4.
Article 29 of the Articles of Association concerning
payment in shares or from the reserves states:
1. The General Meeting may, at the proposal of the
Executive Board and with the approval of the
Supervisory Board, decide to distribute a dividend on
ordinary shares in whole or in part in shares of the
company and not in cash.
2. The General Meeting may decide to make a
distribution on ordinary shares, in whole or in part, in
shares of the company and not in cash.
3. The General Meeting may, at the proposal of the
Executive Board and with the approval of the
Supervisory Board, decide to make a distribution to
holders of ordinary shares from the distributable part
of the shareholders’ equity. The provisions in
paragraph 1 of this article will apply mutatis mutandis.
Distribution as meant in the present paragraph 3 will
only apply if all the amounts owed by virtue of Article
28, paragraph 1 have been paid.
4. In the event of a merger of a Subsidiary of the
company, the General Meeting will have the authority
to issue shares from one or more of the company’s
reserves, which do not need to be retained pursuant
to the law or these Articles of Association.
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independent auditor's report
To the shareholders and Supervisory Board of Randstad Holding nv
report on the audit of the financial statements 2017 included in the annual report
our opinion
We have audited the accompanying financial statements 2017 of Randstad Holding nv, based in Diemen. The financial
statements include the consolidated financial statements and the company financial statements.
In our opinion:
• The accompanying consolidated financial statements give a true and fair view of the financial position of Randstad
Holding nv as at 31 December 2017, and of its result and its cash flows for 2017 in accordance with International
Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil
Code.
• The accompanying company financial statements give a true and fair view of the financial position of Randstad Holding
nv as at 31 December 2017, and of its result for 2017 in accordance with Part 9 of Book 2 of the Dutch Civil Code.
The consolidated financial statements comprise:
1. The consolidated statement of financial position as at 31 December 2017.
2. The following statements for 2017: the consolidated statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows.
3. The notes comprising a summary of the significant accounting policies and other explanatory information.
The company financial statements comprise:
1. The statement of financial position as at 31 December 2017.
2. The income statement for 2017.
3. The notes comprising a summary of the accounting policies and other explanatory information.
basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities
under those standards are further described in the “Our responsibilities for the audit of the financial statements” section
of our report.
We are independent of Randstad Holding nv in accordance with the EU Regulation on specific requirements regarding
statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act),
the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in
the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA,
Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at
€ 50 million. The materiality is based on 6% of Income before taxes. We have also taken into account misstatements
and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative
reasons.
In the previous year materiality was determined for the financial statements as a whole at € 30 million, based on 4% of
Income before taxes. Generally, when using Income before taxes as a benchmark, a percentage is applied towards the
lower end in the range of 5% to 10%. In the first two years, we worked with a reduced materiality level as we had been
recently appointed. As this is our third year, we believe that current materiality level reflects what is considered
important for the users of the financial statements and reflects the level of activity of the company.
Audits of the Group entities (components) were performed using materiality levels determined by the judgment of the
group engagement team, taking into account the materiality of the ﬁnancial statements as a whole and the reporting
structure within the Group. Component materiality did not exceed € 30 million.
We agreed with the Supervisory Board that misstatements in excess of € 2.5 million, which are identified during the
audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative
grounds.
scope of the group audit
Randstad Holding nv is at the head of a group of entities. The financial information of this Group is included in the
consolidated financial statements of Randstad Holding nv.
In establishing the overall group audit strategy and plan, we determined the type of work that needed to be performed
at the Group entities by the group engagement team and by component auditors from other Deloitte firms. The newly
acquired company Ausy and Monster Worldwide, which was acquired in prior year, were included in the audit scope
and were audited by other (non-Deloitte) audit firms. We directed and supervised their work as part of the group audit.
Where the work was performed by component auditors, we determined the level of involvement we needed to have in
the audit work at those Group entities so as to be able to conclude whether sufficient appropriate audit evidence had
been obtained as a basis for our opinion on the group financial statements as a whole. For each Group entity we
determined whether we required an audit of their complete financial information or whether other procedures would
be sufficient. The following Group entities were subject to a full scope audit: the United States, France, the Netherlands,
Germany, Belgium, Italy, Spain, United Kingdom, Sweden, Japan, Australia, India, Monster Worldwide, and the Ausy
Group. These Group entities were selected because of their financial significance to the Group’s revenue or assets. In
line with prior years, the group engagement team visited components in several key locations.
In addition, we performed review procedures or specific audit procedures at other Group entities.
audit coverage
Audit coverage of consolidated revenues
89%
Audit coverage of consolidated assets
87%
The group consolidation, financial statement disclosures and certain centrally managed subjects were audited by the
group engagement team at the head office. These subjects include amongst others the annual goodwill impairment
test, purchase price allocation for acquisitions and the valuation of deferred tax assets.
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By performing the procedures mentioned above at Group entities, together with additional procedures at Group level,
we have been able to obtain sufficient and appropriate audit evidence about the Group’s financial information to provide
an opinion about the consolidated financial statements.
our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are
not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
key audit matter
how the key audit matter was addressed in the audit
revenue
description
The company’s revenue for the year 2017 amounts
to € 23,272.8 million. In recent years, the
composition of the revenue started to change due
to Randstad’s strategic focus on digitalization and
professionals, which is amongst others reflected in
the acquisition of Monster Worldwide in 2016 and
Ausy Group in 2017.
Due to this trend we have considered revenue
recognition a key audit matter.
Due to differences in nature of businesses, internal
processes, size of components, internal control
environment and complexity within the Group, we
tailored our audit approach regarding revenue per
component. At each component level, revenue
recognition is assessed and pinpointed to the risks
of material misstatement which have largely been
linked to management estimates and manual
adjustments. The company’s disclosures
concerning revenue are included in note 4.4 to the
consolidated financial statements.
our response
Together with our component auditors, we updated our understanding of the different
revenue streams, internal processes and internal control environments within the group as
input for the risk assessment. We identified the relevant key controls (including IT related
controls) to the extent necessary within the scope of the audit of the financial statements.
Where deemed effective and efficient we have tested the operating effectiveness of these
key controls. Where deficiencies were identified, the compensating controls and
remediation measures of the company were evaluated and focused procedures were
carried out. If needed we performed additional substantive procedures in order to
appropriately address the risks.
In addition to control testing, we have performed substantive audit procedures including
test of details and substantive analytical procedures on sales transactions. These
procedures included tests to assess revenue transactions during the year and after balance
sheet date. We analyzed differences between hours written, billed and paid of temporary
workers to address completeness of revenue. Furthermore, we tested manual journal
entries posted to revenue in order to ensure that these entries were appropriate.
The scope and nature of the procedures performed were appropriate and sufficient to
address the risks of material misstatement of different revenues.
valuation of deferred tax assets
description
The company’s deferred tax assets as at December
31, 2017 are valued at € 437.9 million. Under EU-
IFRS, the company is required to periodically
determine the valuation of deferred tax positions.
This area was significant to our audit because of the
related complexity of the valuation process which
involves significant management judgment. The
key judgement areas include expected future
market and economic conditions and applicable tax
laws and regulations. The company’s disclosures
concerning income taxes are included in note 4.3
to the consolidated financial statements.
our response
Our audit procedures included obtaining an understanding of management’s process for
recognizing and measuring deferred tax assets and testing relevant controls. Our audit
procedures mainly comprised of substantive audit procedures and focused on assessing
the recoverability of deferred tax assets. We assessed the consistency of management’s
profitability forecasts with those included in the annual goodwill impairment test. We also
assessed relevant tax developments with a particular focus on key assumptions underlying
the valuation of the deferred tax assets such as changes in the statutory income tax rate
(amongst others the US tax reform) and statutes of limitation. We involved tax specialists
to assist us in evaluating the assumptions and methodologies used by the company. We
also assessed the adequacy of the company’s disclosures on deferred tax positions and
assumptions used.
We paid specific attention to the deferred tax assets of the USA, Luxembourg, and France
in view of their significance and the level of management judgment involved. Our audit
procedures are deemed appropriate and sufficient to address the risks of material
misstatement.
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other information.
key audit matter
how the key audit matter was addressed in the audit
valuation of goodwill
description
At December 31, 2017 the company’s goodwill carrying
balance is € 3,077.3 million. Under EU-IFRS, the
company is required to annually perform an impairment
test of goodwill. This annual impairment test was
significant to our audit because the assessment process
involves significant management judgment and is
based on assumptions that are affected by expected
future market and economic conditions. Management
concluded that no goodwill impairment was needed.
The key assumptions and sensitivities are disclosed in
note 4.1 to the consolidated financial statements.
Due to the significance of the goodwill balance and its
dependence on management judgement, we
considered goodwill a key audit matter. We have
pinpointed the risk to those areas that are particularly
sensitive to changes in assumptions.
our response
Our audit procedures include obtaining an understanding of management’s annual
impairment test including relevant controls. Our audit procedures mainly comprised
of substantive audit procedures. We involved our valuation experts to assist us in
evaluating the assumptions and methodologies used in the annual impairment test
prepared by the company. We challenged management’s assumptions that were most
sensitive including projected revenue growth, EBITA margin, discount rate and
perpetual growth. These procedures included corroborating management’s
judgements by comparing the assumptions to historic performance, analyst reports,
local economic development and industry outlook. We assessed the sensitivity of
changes to the respective assumptions on the outcome of the goodwill impairment
calculations. We also assessed the adequacy of the company’s related disclosures in
note 4.1 to the consolidated financial statements.
As part of our audit procedures we have paid specific attention to cash generating
units that are most sensitive to changes in assumptions and determined that the
disclosure in note 4.1 adequately reflects such sensitivity, which is mainly related to
projected revenue growth, EBITA and discount rates.
Compared to previous year the audit of business combinations is no longer considered a key audit matter due to the
fact that entities acquired in 2017 (Ausy, BMC, Sageco and eSolve) are financially less significant compared to the
entities acquired in 2016 (Proffice, Twago, Obiettivo Lavoro, Careo and Monster).
report on the other information included in the annual report
In addition to the financial statements and our auditor’s report thereon, the annual report contains other information
that consists of:
• Management Report
• Other Information as required by Part 9 of Book 2 of the Dutch Civil Code
• Other information as included in the annual report
Based on the following procedures performed, we conclude that the other information:
• Is consistent with the financial statements and does not contain material misstatements.
• Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the
financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the
Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed
in our audit of the financial statements.
Management is responsible for the preparation of the other information, including the Management Report in
accordance with Part 9 of Book 2 of the Dutch Civil Code, and the other information as required by Part 9 of Book 2 of
the Dutch Civil Code.
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other information.
report on other legal and regulatory requirements
engagement
We were appointed by the general meeting as auditor of Randstad Holding nv on April 3, 2014 as of the audit for year
2015 and have operated as statutory auditor ever since that date.
no prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific
requirements regarding statutory audit of public-interest entities.
description of responsibilities regarding the financial statements
responsibilities of management and the supervisory board for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU-
IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control
as management determines is necessary to enable the preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, management is responsible for assessing the company’s ability
to continue as a going concern. Based on the financial reporting frameworks mentioned, management should prepare
the financial statements using the going concern basis of accounting unless management either intends to liquidate
the company or to cease operations, or has no realistic alternative but to do so.
Management should disclose events and circumstances that may cast significant doubt on the company’s ability to
continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate
audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all
material errors and fraud during our audit. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures
and the evaluation of the effect of identified misstatements on our opinion.
We have exercised professional judgement and have maintained professional skepticism throughout the audit, in
accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit
included e.g.:
• Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error,
designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
company’s internal control.
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• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• Concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue
as a going concern.
• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures.
• Evaluating whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing
the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for
Group entities. Decisive were the size and/or the risk profile of the Group entities or operations. On this basis, we
selected Group entities for which an audit or review had to be carried out on the complete set of financial information
or specific items.
We communicate with the Executive and Supervisory Board regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant findings in internal control that we identified
during our audit. In this respect we also submit an additional report to the audit committee in accordance with Article
11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information
included in this additional report is consistent with our audit opinion in this auditor's report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that
were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not
communicating the matter is in the public interest.
Amsterdam, 12 February 2018
Deloitte Accountants B.V.
B.E. Savert
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supplementary
information.
contents
randstad at a glance
management report
governance
financial statements
supplementary information
198 glossary
203 sustainability and industry memberships and
partnerships
204 certifications, rankings, and awards
206 highest randstad positions in industry associations
207 financial calendar
208 history timeline
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ten years of randstad (1).
amounts in millions of €, unless stated otherwise
2017
2016
2015
2014
2013
Revenue
23,272.8
20,684.1
19,219.2
17,249.8
16,568.3
Growth %
12.5%
7.6%
11.4%
4.1%
(3.0)%
Gross profit1
4,705.5
3,934.2
3,594.5
3,177.6
3,010.0
EBITDA1
1,080.6
966.1
896.7
725.9
597.9
EBITA1
993.7
892.0
832.0
660.7
529.7
Operating profit/(loss)1
859.7
790.6
704.7
515.3
366.3
Net income
631.4
588.2
518.8
340.1
230.7
Growth %
7.3%
13.4%
52.5%
47.4%
528.6%
Net cash flow from operations
688.1
559.7
565.6
557.5
340.7
Free cash flow
585.6
464.6
498.8
487.7
292.9
Depreciation, amortization and impairment of property, plant,
equipment, and software
86.9
74.1
64.7
65.2
68.2
Additions to property, plant, equipment, and software
107.3
97.2
67.2
65.7
61.5
Amortization and impairment of acquisition-related intangible assets
and goodwill, and badwill
134.0
101.4
127.3
145.4
163.4
Shareholders' equity
4,251.0
4,140.1
3,861.7
3,313.1
2,907.8
(Net debt) / net cash
(1,025.7)
(793.4)
(173.2)
(422.0)
(761.0)
Operating working capital2
889.4
712.1
621.4
487.7
459.5
Average number of candidates
668,800
626,300
597,400
580,300
567,700
Average number of corporate employees
37,930
32,280
29,750
28,720
28,030
Number of branches, year-end
2,900
2,974
2,750
2,816
3,161
Number of inhouse locations, year-end
1,958
1,778
1,723
1,595
1,426
Market capitalization, year-end
9,390.4
9,431.2
10,529.1
7,215.2
8,366.0
Number of ordinary shares outstanding (average in millions)
183.1
182.7
181.7
178.9
175.5
Closing price (in €)
51.24
51.53
57.53
40.06
47.15
Ratios in % of revenue
Gross profit1
20.2%
19.0%
18.7%
18.4%
18.2%
EBITDA1
4.6%
4.7%
4.7%
4.2%
3.6%
EBITA1
4.3%
4.3%
4.3%
3.8%
3.2%
Operating profit1
3.7%
3.8%
3.7%
3.0%
2.2%
Net income
2.7%
2.8%
2.7%
2.0%
1.4%
Basic earnings per ordinary share (€)
3.38
3.15
2.79
1.83
1.25
Diluted earnings per ordinary share (€)
3.36
3.13
2.76
1.81
1.23
Diluted earnings per ordinary share before amortization and
impairment of acquisition-related intangible assets and goodwill (€)
3.85
3.52
3.23
2.35
1.87
Dividend per ordinary share (€)
2.76
1.89
1.68
1.29
0.95
Payout per ordinary share in %
67%
50%
50%
50%
45%
1 The results as presented in this overview are actual results. As such, they have not been adjusted for one-offs, integration costs or acquisition-related costs.
2 Operating working capital (as from 2014): trade and other receivables minus the current part of financial fixed assets, deferred receipts from disposed Group companies,
and interest receivable minus trade and other payables, excluding interest payable. Comparative figure for 2013 is adjusted; all other years are not adjusted.
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ten years of randstad (2).
amounts in millions of €, unless stated otherwise
2012
2011
2010
2009
2008
Revenue
17,086.8
16,224.9
14,179.3
12,399.9
14,038.4
Growth %
5.3%
14.4%
14.4%
(11.7)%
52.6%
Gross profit1
3,107.3
2,953.9
2,669.3
2,421.3
2,972.3
EBITDA1
547.7
633.6
598.9
346.0
744.0
EBITA1
463.6
553.1
513.6
252.4
644.0
Operating profit/(loss)1
127.6
249.7
341.2
93.8
(34.7)
Net income2
36.7
179.0
288.5
67.6
18.4
Growth %
(79.5)%
(38.0)%
326.8%
267.4%
(95.2)%
Net cash flow from operations
528.6
519.5
369.2
742.7
760.1
Free cash flow
466.5
435.2
309.3
698.1
672.7
Depreciation, amortization and impairment of property, plant,
equipment, and software
84.1
80.5
85.3
93.6
100.0
Additions to property, plant, equipment, and software
63.5
85.5
60.7
48.5
92.0
Amortization and impairment of acquisition-related intangible assets
and goodwill, and badwill
336.0
303.4
172.4
158.6
678.7
Shareholders' equity
2,724.9
2,898.4
2,850.8
2,491.0
2,416.9
(Net debt) / net cash
(1,095.7)
(1,302.6)
(899.3)
(1,014.7)
(1,641.0)
Operating working capital3
527.6
631.6
525.5
395.2
711.5
Average number of candidates
581,700
576,800
521,300
465,600
555,600
Average number of corporate employees
29,320
28,700
25,680
27,640
28,230
Number of branches, year-end
3,191
3,566
3,085
3,182
4,146
Number of inhouse locations, year-end
1,305
1,145
1,110
947
1,087
Market capitalization, year-end
4,785.3
3,907.9
6,716.9
5,917.6
2,466.9
Number of ordinary shares outstanding (average in millions)
171.9
170.8
169.9
169.6
148.6
Closing price (in €)
27.81
22.86
39.50
34.90
14.55
Ratios in % of revenue
Gross profit1
18.2%
18.2%
18.8%
19.5%
21.2%
EBITDA1
3.2%
3.9%
4.2%
2.8%
5.3%
EBITA1
2.7%
3.4%
3.6%
2.0%
4.6%
Operating profit1
0.7%
1.5%
2.4%
0.8%
(0.2)%
Net income
0.2%
1.1%
2.0%
0.5%
0.1%
Basic earnings per ordinary share (€)
0.17
1.00
1.65
0.36
0.07
Diluted earnings per ordinary share (€)
0.17
1.00
1.63
0.36
0.07
Diluted earnings per ordinary share before amortization and
impairment of acquisition-related intangible assets and goodwill (€)
1.73
2.42
2.32
0.99
4.38
Dividend per ordinary share (€)
1.25
1.25
1.18
-
-
Payout per ordinary share in %
59%
53%
60%
-
-
1 The results as presented in this overview are actual results. As such, they have not been adjusted for one-offs, integration costs or acquisition-related costs.
2 For the year 2007, net income includes dividend on preferred shares as financial expenses under net finance costs.
3 Operating working capital (as from 2014): trade and other receivables minus the current part of financial fixed assets, deferred receipts from disposed Group companies,
and interest receivable minus trade and other payables, excluding interest payable. Comparative figure for 2013 is adjusted; all other years are not adjusted.
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glossary.
operational glossary
activity-based field steering
Our activity-based field steering (ABFS) model is used to
manage and direct performance across our businesses.
By embedding operational performance tools at every
level of our organization, the input-based ABFS model
helps operational managers to take the right decisions,
at the right time, and translate them into action.
Managers receive up-to-date, accurate reports on a
weekly basis, covering a range of key performance
indicators. These data enable us to manage our units
and teams in the field by adapting to changing client and
market demands as they occur.
agency work
Agency work is a special form of temporary work, where
generally the employer does not hire the employee
directly on a contract with a limited duration, but
through a private employment agency. The employee is
mostly hired directly by the employment agency, mostly
on a temporary basis, but sometimes on a permanent
contract. During the contract period, the employee can
be assigned to different user companies.
blue-collar
Within Staffing, we typically divide the market into blue-
collar and white-collar work. The distinguishing factor is
difference in skill sets. Blue-collar is predominantly
geared towards industrial and technical job profiles. ↵
branches
Branches are physical office locations from which our
consultants operate.
candidate
Another term for the people we help to find work at our
clients (temporary and permanent employees).
candidates/staffing employees working
The number of temporary employees currently working
for our clients.
concepts
Our concepts represent the services we offer to our
clients. We standardize the working processes per
concept in order to easily 'copy and paste' them across
our operations around the world.
consultant
A consultant is a front-office employee who is located at
one of our outlets (i.e., branch or Inhouse location),
directly meeting the demands of clients and candidates.
digital factory
The Digital Factory is responsible for the global
digitalization of Randstad. Their role is to stimulate and
support relevant internal digital initiatives in the HR Tech
arena, to develop new concepts and implement them
globally, and to scale up innovations within Randstad
and for its stakeholders.
FTE
Full-time equivalent.
inhouse location
An Inhouse location is a branch that is located at a
client's premises, where our consultants work on-site
dedicated to that specific client.
managed services provider (MSP)
An MSP is a company that takes on primary
responsibility for managing an organization's
contingent workforce program. An MSP may or may not
be independent of a staffing supplier.
outlets
Outlets are branches and Inhouse locations combined.
outplacement
Within outplacement, we advise and support
organizations in situations in which employment
contracts need to be terminated because of a strategic
decision or for other reasons. We assist employees in
their search for a suitable new job to make the transition
as smooth as possible.
outsourcing
Outsourcing is the sustainable transfer of several client
activities with output responsibility both in the
production/logistics and in the administrative
environment.
penetration rate
The penetration rate is the percentage of temporary
workers in the total working population.
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glossary.
permanent placement
Apart from attracting candidates for temporary jobs, we
also service clients by recruiting candidates for
permanent positions. The process involved is referred
to as permanent placement.
professionals
Professionals is the service we offer to our clients where
we offer a broad and deep range of candidates with an
academic or equivalent degree on a temporary or
interim basis, as well as on a permanent placement basis
through Search & Selection.
recruitment
The process of hiring candidates for permanent
positions.
recruitment process outsourcing (RPO)
RPO is the transfer of operational responsibility for one
or more recruiting functions or tasks, including
recruitment administration, from the client to a service
provider.
specialties
Specialties are the specific market segments that
dedicated units in our Staffing business focus on, such
as healthcare, transport, airports, and contact centers.
The knowledge, experience, and expertise we gain by
focusing on these specialties translate into added value
for clients and candidates.
staffing
A service we offer to our clients that involves matching
candidates with temporary positions at our clients.
temporary work
Compared to part-time work, temporary work is an even
more flexible form of labor. This includes both agency
workers and limited-duration contract workers.
two-tier board structure
A governance structure in which the board is split
between an Executive Board and a Supervisory Board.
The Executive Board is responsible for developing,
driving, executing, and achieving the approved strategy
and strategic targets, while the Supervisory Board acts
in the interest of the company by supervising and
advising the Executive Board.
vendor management system
A VMS is an internet-enabled contingent worker
sourcing and billing application that enables a company
to procure and manage a wide range of contingent
workers and services in accordance with client business
rules.
white-collar
Within Staffing, we typically divide the market into blue-
collar and white-collar work. The distinguishing factor is
difference in skill sets. White-collar is predominantly
geared towards administrative job profiles.
sustainability glossary
fatality
An incident causing the death of a corporate employee
or candidate at work, in traffic, while working, or while
commuting.
fixed-term contract
An employment contract with a particular end date,
meaning that the contract ends after a certain event or
on the completion of a task.
lost time injury (LTI)
Days off work due to work-related injury, based on actual
working days. Injury rate calculation: number of
workings days lost divided by (average FTE x available
days).
misconduct reporting procedure
Grievance mechanism; a facility operated by an
independent external provider, where serious breaches
of the Randstad business principles can be reported if
the regular avenues are inappropriate.
OECD
The mission of the Organisation for Economic Co-
operation and Development (OECD) is to promote
policies that will improve the economic and social well-
being of people around the world.
permanent or open-term contract
An employment contract for an indefinite period of time;
this metric includes employees with a permanent or
open-term job but without an official contract, which is
often the case in the US, for example.
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glossary.
sickness rate
Includes both short-term and long-term sickness.
Generally excludes absence due to work-related
accidents and pregnancy leave, unless local authorities
use a different definition.
sustainable development goals (SDG)
In September 2015, the UN launched the 17 Sustainable
Development Goals. Countries adopted these goals to
end poverty, protect the planet, and ensure prosperity
for all by 2030.
training costs
Total expenditure on training of candidates or
employees. In addition to external costs of training, an
estimate is made of the salary costs of internal trainers.
training hours
Number of hours spent on training of candidates or
employees. Training of employees excludes attendance
at the Frits Goldschmeding Academy, which is reported
separately.
volunteer hours
The number of hours actually worked by the volunteer(s)
or: number of months of placement x 4 weeks x 36
hours; for short-term volunteers: number of weeks x 36
hours.
VSO volunteers
Number of employees (headcount) working on an
indefinite contract with an operating entity, who have
provided support to VSO (e.g., HR/finance/marketing/
legal or strategic advice, fundraisers) either in their
home country or at a VSO office (e.g., in the UK or the
Netherlands), or on an assignment in Africa or Asia.
work-related injuries
Accidents during working hours, whether on work
premises or while traveling as part of work duties,
causing candidates or employees to be injured on a
scheduled workday or normal work shift, resulting in
days off work.
world employment confederation (europe)
Our worldwide/European industry federation that
strives for well-regulated working conditions for
corporate employees and candidates.
financial glossary
amortization (and impairment) of
acquisition-related intangible assets
Upon acquisitions, Randstad identifies intangible assets,
such as customer relationships, brand names, and
candidate databases. On average, these acquisition-
related intangible assets are amortized over 1 to10 years,
leading to an annual non-cash amortization charge,
which is included in operating profit.
capital expenditures
Part of cash flow from investing activities. Amounts
incurred for investments in property, plant and
equipment (e.g., furniture, computer hardware), and
software.
cash flow from operating activities
EBITDA adjusted for changes in working capital, taxes
on income, movements in other balance sheet
positions, such as provisions, and certain other non-
cash items.
closing price
Share price of Randstad at the end of a given trading day
on Euronext, where an ordinary share of Randstad is
listed.
cost of services
Expenses which are directly attributable to revenue.
These costs mainly include expenses related to staffing
employees, such as wages, social security charges, and
taxes.
diluted earnings per ordinary share
Diluted earnings per ordinary share are calculated by
adjusting the weighted average number of ordinary
shares outstanding, assuming conversion of all dilutive
potential ordinary shares. The dilutive potential ordinary
shares arise from various share-based payment
arrangements.
dividend on ordinary shares
Part of net income attributable to holders of ordinary
shares that will be distributed to holders of ordinary
shares.
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glossary.
DSO (days sales outstanding, moving
average)
The DSO represents the number of days before we are
able to convert sales into cash (received from our client).
In the Annual Report, we use the moving average of the
monthly DSO.
EBITA
Earnings Before Interest, Taxes and Amortization (and
impairment of acquisition-related intangible assets and
goodwill). It is basically the same as operating profit
adjusted for amortization charges on acquisition-related
intangible assets. This is the key performance indicator
when looking at the profitability of our business.
EBITA margin
EBITA as percentage of revenue.
EBITDA
Earnings Before Interest, Taxes, Depreciation of
property, plant and equipment and Amortization of
software.
economic value added (EVA)
A financial performance method to calculate the true
economic profit of a corporation. EVA can be calculated
as net operating profit after taxes minus a charge for the
opportunity cost of the capital invested.
enterprise value
Market capitalization plus net debt.
EPS (earnings per share)
Net income attributable to holders of ordinary shares
divided by the weighted average number of ordinary
shares outstanding.
free cash flow (FCF)
Free cash flow is the sum of net cash flow from operating
activities and investing activities adjusted for cash flows
for acquisitions and disposals of subsidiaries, equity
investments and associates.
gross margin
Gross profit as percentage of revenue.
gross profit
Revenue minus cost of services.
IFRS
International Financial Reporting Standards.
incremental conversion ratio (ICR)
Additional EBITA in a year, when compared with the
previous year, as a percentage of additional gross profit
in a year, when compared with the previous year, based
on organic growth. We aim for an incremental
conversion ratio of 50%, if gross profit growth has been
achieved.
leverage ratio
Net debt divided by 12-month EBITDA. We aim at a
leverage ratio of between 0 and 2x EBITDA, which is
important for continuity. The syndicated loan
documentation allows us a leverage ratio of 3.5x
EBITDA.
market capitalization
Total shares outstanding multiplied by the share price of
Randstad.
net debt
Cash and cash equivalents minus current borrowings
and non-current borrowings.
net finance costs
Net finance costs include net interest expenses in
relation to our net debt position, foreign currency
exchange results, net interest expenses due to passage
of time, and other items.
net income
Operating profit minus net finance costs, share of profit
(or loss) of associates, and taxes on income.
net income attributable to holders of
ordinary shares
Net income adjusted for the dividend on preferred
shares, as well as for results of non-controlling interests.
operating expenses
Operating expenses comprise personnel and
accommodation expenses in relation to the activities at
the outlets and the various head offices, IT expenses,
other general and administrative expenses, as well as
the amortization and impairment of acquisition-related
intangible assets and goodwill.
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glossary.
operating expenses margin
Operating expenses as a percentage of revenue.
operating profit
Gross profit minus operating expenses.
operating working capital
Trade and other receivables (excluding current part of
loans and receivables and other interest receivable)
minus trade and other payables (excluding interest
payable). The level of working capital is related to the
timing of the invoicing and payrolling processes (weekly
or monthly). The payment terms negotiated with clients
and the effectiveness of our collection processes are
equally important. Liabilities, such as social security
charges, wage tax, and value-added tax are settled
every month and in some countries on a quarterly basis.
Payment terms are often determined by law and
therefore difficult to influence.
payout per ordinary share
Dividend on ordinary shares divided by net income per
share attributable to holders of ordinary shares before
amortization and impairment of acquisition-related
intangible assets and goodwill, integration costs, and
one-offs (after taxes).
productivity
We measure productivity in three ways: (1) gross profit
per staff member (GP/FTE), (2) gross profit in relation to
personnel expenses (GP/PE), and (3) the number of
candidates per staff member (Temps/FTE).
recovery ratio (RR)
The total year-on-year change in operating expenses as
a percentage of the decline in gross profit. We aim for a
recovery ratio of 50% in case gross profit declines.
return on invested capital (ROIC)
This ratio is calculated by dividing the after-tax
operating income (NOPAT) by the book value of both
debt and equity capital less cash/equivalents.
revenue
We distinguish three types of revenue: (1) revenue from
temporary billings, (2) permanent placement fees, and
(3) other revenue. 'Revenue from temporary billings'
includes the amounts received or receivable for the
services of temporary staff, including the salary and
salary-related employment costs of those staff. These
revenues are generally based on the number of hours
worked by the temporary staff. 'Revenue from
permanent placements' includes the fee received or
receivable for the services provided. The fee is generally
calculated as a percentage of the candidate's
remuneration package. The category 'other revenue'
includes revenue for services such as job posting and
résumé services on our digital platforms, payrolling,
outplacement, outsourcing, MSP and RPO services,
consultancy, and related HR offerings.
share in profit/loss of associates
Associates are companies in which Randstad Holding nv
has significant influence, but no control, over the
financial and operational policies, generally
accompanying a shareholding of between 20% and 50%
of the voting rights. The share of profit or loss of the
associate is presented in this line of the income
statement.
syndicated credit facility
Randstad has a € 1,850 million multi-currency
syndicated revolving credit facility at its disposal, which
will mature in July 2022. The loan documentation allows
a leverage ratio of 3.5x EBITDA, although we aim for a
leverage ratio of between 0 and 2, which is important
for continuity. In certain cases, we are allowed to report
a maximum leverage ratio of 4.25x EBITDA for a limited
amount of time.
taxes on income
Taxes on income comprise current taxes and the
realization of deferred taxes. Current taxes on income
are the sum of taxes levied on the results before taxes in
the countries in which those results were generated,
based on local tax regulations and against tax rates of
the applicable year. Tax-exempt income and expenses
not deductible for tax purposes are taken into account
in calculating taxes on income.
velocity of shares
Velocity represents the average holding period of a
share in Randstad. It is measured as the total number of
shares traded divided by the average number of shares
outstanding.
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sustainability and industry
memberships and partnerships.
Through our membership in the World
Employment Confederation (before: Ciett), we
strive for well-regulated working conditions for
our corporate employees and candidates.
The International Organisation of Employers
(IOE) is the largest network of the private sector
in the world, with more than 150 business and
employer organization members. Through our
partnership with the IOE, our contributions and
perspectives are reflected in matters of
international standards, business and human
rights, CSR, occupational health and safety, and
international industrial relations.
Through our membership in the World
Employment Confederation Europe (before:
Eurociett), we strive for well-regulated working
conditions for our employees and candidates.
Brussels European Employee Relations Group
(BEERG) is an information-sharing and
networking group established in 2002, which
now has over 60 member companies
headquartered in the EU, the US, India, and
Japan. Through our BEERG membership, we
discuss employment law and labor relations
issues with other members and stakeholders,
such as speakers from trade unions, the
European Commission, and national or
international agencies.
CSR Europe is a leading European business
network for corporate social responsibility, with
more than 60 leading multinational
corporations as members. Randstad is involved
in CSR Europe projects in the areas of skills for
employability, mainstreaming diversity, and
well-being in the workplace.
BusinessEurope is the leading advocate for
growth and competitiveness at European level,
standing up for companies across the continent
and campaigning on the issues that most
influence their performance. Through our
BusinessEurope membership, Randstad
contributes to the world of work on a European
and international level.
Randstad is a registered organizational
stakeholder of the Global Reporting Initiative
(GRI) and supports its mission to make
sustainability reporting standard practice; one
which helps to promote and manage change
towards a sustainable global economy.
VNO-NCW, the Confederation of Netherlands
Industry and Employers, represents the
common interests of Dutch business, both at
home and abroad. Members comprise over 160
trade and sector associations, representing
more than 120,000 enterprises.
Our partnership with Voluntary Service
Overseas combines the strength of two
organizations driven by a common aim: to help
alleviate poverty across the globe by sharing
skills and expertise with local communities.
VSO focuses on sustainable development, and
places volunteers through partners in
developing countries. Randstad supports VSO
by providing strategic support, expertise,
funding, and most of all, through our employees
who can volunteer themselves.
The Business and Industry Advisory Committee
to the OECD (BIAC) speaks for business at the
OECD. Established in 1962, it stands for policies
that enable businesses of all sizes to contribute
to growth, economic development and
prosperity. Through BIAC, national business
and employers’ federations and their members
provide expertise to the OECD and
governments for competitive economies,
better business, and better lives.
The United Nations Global Compact is a
voluntary business initiative for companies
committed to aligning their activities with ten
universally accepted principles in the areas of
human rights, labor, the environment, and
anticorruption. As signatories of the Compact
since 2004, Randstad firmly believes that
responsible business promotes the
development of markets, commerce,
technology, and finance for the benefit of
economies and societies everywhere.
The Business and Industry Advisory Committee
to the OECD (BIAC) speaks for business at the
OECD. Established in 1962, it stands for policies
that enable businesses of all sizes to contribute
to growth, economic development, and
prosperity. Through BIAC, national business
and employers’ federations and their members
provide expertise to the OECD and
governments for competitive economies,
better business, and better lives.
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certifications, rankings, and awards.
certifications
• GULP Information Services GmbH holds the seal of
approval ‘Arbeits- und Gesundheitsschütz nach LS-
Standard’ from TÜV SÜD Life Service GmbH as one of
only four enterprises in Bavaria.
• In the field of data protection Randstad Germany was
certified by the TÜV Rheinland Industrie Service GmbH.
• Randstad France and Tempo-Team Belgium hold the
Label Diversité and Randstad Group France the Label
égalité professionnelle femmes/hommes.
• Randstad Spain holds the Youth Employment
Certificate.
• Randstad Australia has the AS/NZS 4801 accreditation
(internationally known as OHSAS 18001).
• Randstad Brazil and Spain hold the OHSAS 18001
certificate (Occupation Health and Safety Assessment
Series for health and safety management system).
• The labor management system ‘AMS’ of Randstad
Germany was certified for systematic and effective
industrial protection of the employer’s liability. This
certification includes the standards NFL/ILO-OSH 2001
and OHSAS 18001:2007.
• Randstad Switzerland holds the Swiss staffing SQS label
which stands for ethical working and for high
professional standards in the industry.
• GULP Germany holds the Bildungsträger AZAV
certificate.
• Randstad, Tempo-Team and Yacht in the Netherlands
have been certified by FIRA Rating System for
sustainability assurance based on ISO 26000,
consulted by purchasing organizations.
• Randstad Belgium, Randstad France, Randstad Italy and
Randstad Holding continue to be certified with the Gender
Equality European & International Standard (GEEIS) for their
professional gender diversity practices.
• Randstad Norway is a certified employer with the certificate
‘Revidert Arbeidsgiver’ and is qualified in the Achilles Joint
Qualification system for suppliers.
• Randstad Italy holds the certification for credit
management process according to CRMS - FP 07/2015
standard.
• Randstad France, Randstad Germany including
Professionals and Tempo-Team, Randstad Belgium
(inhouse) and Tempo-Team Belgium (Staffing and inhouse),
Randstad Spain, Randstad Portugal (Staffing, Professionals,
Contact Centers and Healthcare), Randstad in Italy,
Hungary, India, Japan, Brazil, Australia, Argentina, Greece,
China, Poland, the UK, our companies in Sweden and
Norway, New Zealand, Randstad Interim Luxembourg, Chile
and the companies in the Netherlands are certified under
the ISO 9001 label for quality management.
• Randstad Belgium is certified VCU and Randstad
Professionals Belgium is certified Qfor, where VCU stands
for ‘Health and Safety’ and Qfor for ‘Quality training and
consulting organizations’.
• Randstad Group Netherlands, Randstad Italy, Randstad
Sweden, Randstad Norway, Randstad Brazil and Randstad
Professionals Germany hold the ISO 14001 environmental
management certification.
• Randstad Group Belgium and Randstad Italy hold the Social
Accountability SA 8000 accreditation.
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certifications, rankings, and awards.
rankings and awards
• The Randstad Youth Employability Project, as part of the
Randstad VSO partnership won the VSO Volunteer
Team Award in 2017.
• Randstad Canada was again recognized in 2017 as one
of the Best Workplaces for Women in Canada by the
Great Place to Work® Institute.
• Randstad Japan won the 'Best Practice Award’ from DHL
Supply Chain.
• HR Partners (Australia) has been awarded the Gold
Medal for Recruitment in the HRD Magazine, Service
Provider Awards.
• Stevie Award for Female Executive of the year in Asia,
Australia and New Zealand by Sageco, a RiseSmart
company, Sydney, NSW, Australia: Alison Monroe,
National Director (Australia & NZ).
• With strong showings in multiple market categories,
Randstad Australia took out HRD’s Recruiter of the Year
Award.
• Randstad Construction business in the UK is one of The
Times Top 100 Employers.
• Randstad US named GWBC 2017 Top Corporation.
• Randstad US earns Safety Standard of Excellence® mark
from American Staffing Association and National Safety
Council.
• Randstad Belgium won the special HR community prize
for the HR Excellence Awards in 2017.
• In 2017, on the Acesia platform the rating for Expectra
in terms of CSR is 89/100 (compared to an overall
average of 46/100).
• Randstad Denmark was awarded the ‘Flexworker of the
year’ by the Federation of Staffing Agencies in Denmark.
One of our flexworkers received the prize.
• Randstad Hong Kong won the Silver Award for Best
Recruitment Team at the 2017 Asia Recruitment Awards
for North Asia.
• The Singapore office also clinched the Gold Award for
Best Client Service in the 2017 Asian Recruitment
Awards.
• Randstad Singapore was recently recognized for being
one of the Top Performing Companies in the Reward &
Recognition sub-category in the HRD Asia 2017
Employer of Choice.
• Randstad Asia won the headline award for the second year
in a row at the prestigious Global Recruiter Asia Pacific
Industry Awards 2017: Best Large Recruitment Business
Award.
• Randstad France is among the 2% best staffing companies
in labor practices out of more than 150 staffing companies
assessed by Ecovadis, a platform to monitor sustainability
performance in the supply chain.
• Randstad Spain was a finalist in the Corresponsables
Awards.
• Randstad Germany won the Communicator Award for the
film ‘Diversity’.
• Randstad Germany won the Business Award 2017 ‘Wir für
Anerkennung’ (We stand for recognition) from the Ministry
of Education.
• Randstad Holding was listed in VBDO’s (Dutch Association
of Investors for Sustainable Development) Tax
Transparency Benchmark at position 6.
• 8 executives were included in the Global Power 100 –
Women in Staffing List 2017. The list is compiled by Staffing
Industry Analysts, highlighting women’s contributions to
the staffing industry.
• Randstad Holding has been reconfirmed as a constituent
of the Ethibel Sustainability Index (ESI) Excellence Europe.
• In the Carbon Disclosure Project (CDP) 2017 Randstad
Holding scored a B- (management level) in the Global
Climate report (above industry average).
• Randstad Holding is included in the Dutch Transparency
Benchmark, an annual research on the content and quality
of CSR or integrated reports of Dutch companies.
• According to the Euronext Vigeo index Randstad Holding
is one of the 20 most advanced companies in the Benelux
region and one of the 120 most advanced companies in the
Eurozone region rated on environmental, social and
governance performances.
• Randstad Holding received confirmation of its continued
membership of the FTSE4Good Index Series.
• Randstad Holding is the only HR services provider included
as a member in the Professional Services industry of the
DJSI world and DJSI Europe indices 2017.
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highest randstad positions in industry
associations.
position
country
association name
president
vice-president
board member
member
Argentina
FAETT
x
CASEEC1
x
Austria
ÖPD (Österreichs Personaldienstleister)
x
Australia
RCSA
x
AHRI1
x
Belgium
Federgon
x
Brazil
Sindeprestem (Sao Paolo)
x
Canada
ACSESS
x
NACCB1
x
Chile
AGEST
x
China
Shanghai HR Consulting Association1
x
CAFTS (Beijing)
x
Czech Republic
APPS
x
Denmark
Vikarbureaernes Brancheforening
x
France
PRISM'EMPLOI
x
Germany
BAP
x
Greece
ENIDEA
x
Hungary
SZTMSZ
x
India
ISF
x
Italy
Assolavoro
x
Japan
JASSA
x
JSLA1
x
JHR (umbrella organization)1
x
Luxembourg
Fedil/F.E.S. (Fedil Employment Services)
x
Mexico
AMECH
x
Netherlands
ABU
x
New Zealand
RCSA
x
Norway
NHO Bemanning
x
Poland
Polski HR Forum
x
Singapore
Singapore Professional Staffing Organisation
x
Portugal
APESPE
x
Spain
Asempleo
x
Sweden
Bemanningsforetagen
x
Switzerland
Swiss Staffing
x
Turkey
OIBD
x
UK1
REC
x
Uruguay
CUDESP
x
US
ASA
x
Europe
World Employment Confederation Europe
x
International
World Employment Confederation (WEC)
x
1 Non-WEC member.
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financial calendar.
march 27, 2018
Annual General Meeting of Shareholders
march 29, 2018
Ex-dividend
april 3, 2018
Record date
april 5, 2018
Dividend available for payment
april 24, 2018
Publication of Q1 2018 results (pre-market)
Analyst conference call Q1 2018 results
july 24, 2018
Publication of Q2 2018 results (pre-market)
Analyst conference call Q2 2018 results
october 23, 2018
Publication of Q3 2018 results (pre-market)
Analyst conference call Q3 2018 results
february 12, 2019
Publication of Q4 and annual results 2018 (pre-market)
Analyst conference call Q4 and annual results 2018
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1960
1964
1967
1998/99
1990
1983
1985
1996
1998
2008
2007
2011
2013
2017
2010
2015
International
network doubles 
via aquisitions in 
the US, Germany 
& Spain.
Randstad & Vedior join 
forces becoming the 
2nd largest HR services 
provider worldwide.
Randstad is present in 
20 countries, promoted 
to the AEX index. 
Randstad acquires SFN Group.
The combination creates the 
No. 3 HR services provider in 
North America.
Acquisition of part of 
European staﬀing activities 
of USG People.
Randstad acquires 
BMC and Ausy to 
strengthen the European 
Professionals business.
Randstad acquires 
FujiStaﬀ Holdings 
in Japan. Randstad 
celebrates 50 years 
with a global party 
for nearly 30,000 
employees.
Randstad 
Award
celebrates 
15 years of 
existence.
Uitzendbureau Amstelveen 
founded in the Netherlands.
The company takes a new name: 
Randstad Uitzendbureau.
Staﬀing agency 
Tempo-Team acquired.
Randstad celebrates its 
silver jubilee; 257 branches 
in four countries.
Randstad deploys 16,000 
staﬀing employees at the 
Olympic Games, Atlanta.
Randstad founder, president 
& CEO Frits Goldschmeding
retires.
Randstad has 
32 branches 
in 4 countries.
Randstad shares 
are listed on the 
Amsterdam 
Stock Exchange. 
2016
Acquisition of Proﬀice, 
Obiettivo Lavoro, 
Careo, twago, and 
Monster Worldwide.
history timeline.
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randstad at a glance
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governance
financial statements
supplementary information
annual report 2017
208

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Smidswater
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text and editing
Baxter Communications BV
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phone +31 (0)20 569 59 11
mailing address
P.O. Box 12600
1100 AP Amsterdam-Zuidoost
The Netherlands
comments or questions
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