Analyst day London May 16 2003 www randstadholding

Analyst day, London May 16, 2003 www. randstadholding. com

Welcome · Program aimed at providing better insight into Randstad concepts · Zoom into developments in the UK and North America · In-depth look at tax structure

Program · ‘Randstad concepts’ - Ben Noteboom · Buffet lunch at 12. 30 hrs · ‘Tax accounting’ - John van de Luijtgaarden & Hans van der Kroon · ‘UK staffing market’ - Hans Hoogeveen · Tea break at 14. 45 hrs · ‘Randstad in the US’ · Drinks & snacks at 16. 00 hrs - Jim Reese

Randstad concepts Ben Noteboom Chairman of the Executive Board and CEO

Agenda · Building blocks and organic growth model · Strong concepts - In-house services · Mass-customized and specialties Yacht Market and margin development in the Netherlands

Building blocks Building block Status Strong concepts Implementation of structured work processes and commercial approach in almost all countries The best people HR & MD guidelines and systems have been defined and implemented All training in line with strong concepts Senior management training tripled in 2003 Superior brands Corporate identity Randstad brand “Good to know you” Excellent execution

Key in strategy: organic growth model start 1 growth 1 split 1 2 growth 1 2 split 1 3 2 4 Growth…

Strong concepts: mass-customized · Branded as Randstad and Tempo-Team · Offers a total package including general administrative, industrial, production · Specialties designed for specific sectors or groups of flexworkers

Specialties in mass-customized: 2 -way approach in definition 1. Target business/sector - Call centers, healthcare, transport services, outplacement, outsourcing etc. 2. Flexworker - Secretaries, IT, young professionals, logistics, education, etc.

Specialties in mass-customized (16% of total Group revenue) Other: outplacement, outsourcing, secretaries, education, etc.

Specialties by country Nl US B Call center activities Transport/ F Es Engineering UK Healthcare D logisitics IT/financial Other

Mass-customized best practices · How to go to market - Market knowledge: client & flexworker database - Unit structure · Process finished mid 2004 specialty marketing tools specialized knowledge + + strong concepts

In-house services · Rationale for development in-house services concept - Service to client and flexworker - Low cost model - Capacity in existing branches · Part of growth strategy targeting large customers · Start of copying behavior competitors

Capac video

Professional staffing: Yacht · Market leader in the Netherlands and Belgium · Professionals market historically very profitable and very volatile · Service offering: delivery of knowledge, productivity and direct availability · Profitability to be achieved through aggressive reduction idle time in all Lo. B´s and adjustment cost base · Start-up Germany according to schedule, small loss, 100 interim professionals working

The Netherlands: gross margin and market development 27. 9% 22. 6% 24. 7%

Changed market structure in the Netherlands · > 1200 new staffing companies since abolishment license system · Non-associated companies have taken market share · Market data “Flexmarkt”: smaller companies disappearing · 2 factors behind decline in market - Scarcity on labor market - Price elasticity · Larger companies organize their own flexibility

Price elasticity · 3 components in cost price flexworker - Pay rate - Social security - Margin · No price war: Randstad as market leader always involved in tenders · Decline in market causes erratic price behavior by competition · Importance of market share gain biggest in declining market

Cost base adjustments · New decline in market was largely unexpected · Identifying cost saving opportunities · Maintain external focus · Maintain branch network · The Netherlands: optimizing unit structure through unit clustering · IT costs · Further adjustments to cost base in Germany and North America

Thank you! Any questions?

Tax accounting & IFRS John van de Luijtgaarden Managing director corporate accounting & tax affairs Hans van der Kroon Head of corporate tax department

Agenda · Tax aspects of group structure · Presentation in annual report · Short introduction of IFRS issues

Tax rates € €

1) From Average Rate to Effective Tax rate · The majority of the difference between the average rate the Effective Tax Rate results out of “permanent differences”; Such as: 1. Concern Finance Regime 2. Intercompany Interest shelter 3. Extra tax deductible items (Option- education costs) 4. Movement in valuation allowance on tax assets w. r. t. NOL’s 5. Movement in valuation of tax assets w. r. t. goodwill paid 6. Other permanent non deductible or extra deductible items

1. a Concern Finance Regime Randstad Holding nv Loan Taxation against 7% 100% Foreign Subsidiary Interest Deduction against ~ 36%

1. b Concern Finance Regime · Advance ruling under conditions · Randstad Holding nv being the sole group finance entity · Yearly tax deductible provision of 80% of all finance income: · Example: • • Interest 100 CFM Provision -80 Taxable result 20 20* 35% = 7 CIT = 7% ! Taxable or Tax free release

1. c Intercompany interest shelter Randstad Holding nv 100% Randstad Holding Nederland bv Foreign Subsidiary Randstad Deutschland KG No Dutch taxation Loan Randstad North America LP Interest US Tax deduction

1. d Tax assets w. r. t NOL’s & Goodwill · In various countries group companies are generating taxable losses (also due to goodwill amortization and interest deduction). Most of the countries do provide for a so called carry forward of those losses to the future to be offset against future profits (some countries even a carry back). This future setting off of losses is reflected in the annual account as an asset. · Upon acquisition of some companies in the past goodwill paid has been made tax amortizable but for accounting purposes this goodwill amount has been deducted from equity. The future tax amortization has been booked as an asset in the annual account.

2) From Effective tax rate to cash tax rate · The majority of the difference between the Effective tax rate and the cash tax rate comes from “timing differences”; · Note that they do not influence the P&L but only have an effect on the balance sheet. · Most important beneficial timing difference comes from the fact that our German and US Randstad activities are structured in form of so called transparent entities (KG & Lp). · The taxable results of both the LP and the KG after tax amortization of goodwill paid upon acquisition (which is negative) is deducted from Dutch profits.

2. a. US and German transparent structure Randstad Holding nv 100% Foreign Subsidiary Randstad Holding Nederland bv Taxable profits from Dutch operations +/+ Randstad Deutschland KG Randstad North America LP Tax losses including to goodwill amortization -/-

Cnt’d: From Effective tax rate to cash tax rate · As mentioned: Taxable results Germany and USA after tax amortization of goodwill are deducted from Dutch profits. · This results in a zero current tax payable for the fiscal unity of Randstad Holding Nederland bv · BUT: For the cumulative amount of tax losses deducted no future relief for double taxation will be granted for future profits i. e. any € corporate income tax not paid now will have to be paid “back” if and to the extent both Germany and North America do generate a taxable profit. This is called a “recapture obligation”. · Given the big amounts involved and the timing this is a huge value driver!

Tax assets Consist of: 1. Deferred tax asset (DTA) w. r. t. Net Operating Losses 2. Deferred tax asset on Goodwill charged to equity (up to 2000) 3. Deferred tax assets on other timing differences · Total book value 2002: € 353 million

Valuation allowance as per ultimo 2002: 1. DTA on Goodwill: At acquisition a valuation allowance was made with a view to the long amortization period for tax purposes (being 15 years in Germany and the USA). 2. DTA Net Operating Losses: prudent valuation, based on annual estimation of future taxable results over a reasonable period Up to 2002 this resulted in: · Partial release of valuation allowance on DTA w. r. t. Goodwill; · Additions to valuation allowance on DTA w. r. t. NOL’s

Tax liabilities · The provision for Deferred Tax Liabilities consists mainly of so called “recapture obligations”, which are the result of German and USA tax losses being set off against Dutch taxable profits; Note: this structure does not hit taxes in the P&L but is “only” a cash item. 1. In present: leads to a reduction of the tax cash out. 2. In future: depending on development of taxable profits in Germany and USA the tax cash out will rise.

Effective tax rate 2002 30. 2% · Average applicable rate 29. 2% · Permanent Differences (tax exempt) -22. 7% · Changes in valuation of tax losses 34. 6% · Release of val. all. On DTA wrt Goodwill -17. 8% · Non-deductible items Total 6. 6% 30. 2%

IFRS implementation · Randstad has to apply IFRS as from 2005 · Starting with the first quarterly report 2005 · Comparative figures 2004 must be “comparable” · Material effects of differences between present GAAP and IFRS on equity and P&L to be communicated with interim results 2004 · A number of changes of international standards and interpretations are pending or still expected between today and early 2004. These changes will effect final transition.

IFRS implementation · Main issues identified: - Goodwill of acquisitions prior to 2001 (charged to equity by Randstad) - Pension plans - Stock options - Preferred shares and dividend · A number of not or less material items

Thank you! Any questions?

The UK staffing market Hans Hoogeveen Managing director Randstad UK

UK market · Market volume: € 30. 8 billion · 92% temporary business, 8% permanent business · >3% penetration · Market mature but unprofessional · Fragmented market: 85% of companies independent · Top 10 players only 36% market share · Image flexwork and flexworker very low · UK flexible labor market increasingly driven by EU labor legislation

History of Randstad UK · Established in the UK in 1989 · 1999: 18 branches and £ 18 million turnover · 2001: 36 branches and £ 34. 5 million turnover · 2001: acquisition of Securicor Recruitment Services · 2002: over 85 branches and £ 104 million turnover · Top 25 recruitment company

Strategy · Local market leader · International expertise for local markets · Labor market specialist, opinion leader · Build long term client relationship · Attractive employer for flexworkers and corporate staff · Employment legislation opportunity to add value to our clients and flexworkers · Quality player

Randstad Inhouse Services in the UK · 2000: introduction of Randstad Inhouse Services · 2002: Randstad Inhouse Services 21 branches · Focus on industrial areas in the North West, Midlands and South

Yacht in the UK · Restart in the UK in 2003 · Solely focused on attracting engineers in the utilities and infrastructure sectors · Concentrating on clients in North West, North East and West Midlands

Superior Brand · Implementation of corporate identity with tag line ‘good to know you’ completed · Cardiff branch pilot for new branch corporate identity

Strong concepts in the UK · Randstad mass-customized · Callflex · Driving · Permanent · Randstad Inhouse Services · Yacht

Best people: our consultants · Staff is key component in the building blocks upon which Randstad is developing · No commission · One-stop-shop: consultants are responsible for the full selection process: sell Randstad to client and deal with searching and matching · Zero to hero programme · Investors in People

Excellent execution · The way we work: standardization of work processes · Workpocket · Flexworker Charter · Labor market survey

Flexworker Charter From Day 1 From 26 Weeks • Holiday Pay • Claim training points • Bank Holiday Pay • Company sick pay • Training contribution • Maternity pay and maternity leave • Dependent leave • Paternity leave • Paid time off for medical appointment From 13 Weeks • Paid Bank Holidays From one year • Statutory Sick Pay • Pension • Mortgage references • Enhanced maternity pay and maternity leave • Eyesight tests • Parental leave

Randstad flex-worker retention

Retention industry comparison

Randstad labor market survey · Positive outlook on employment market · Use of non-permanent workers · Ways to attract and retain staff · The UK working week · Staff loyalty · Impact of legislation

Thank you! Any questions?

Randstad in the US Jim Reese Member of the Executive Board CEO Randstad North America

Randstad in the US · Overview of the company - Who we are - Where we are - What we offer · Our focus - Priorities · Moving forward

Who we are Randstad North America Total headcount: 1925

Randstad North America Divisions 1 2 5 3 2 6 7 (1) 15 5 1 (6) 1 4 (1) (6) (1) 2 (2) 35 2 (1) 2 (2) 12 (4) (18) (3) 2 7 1 6 (1) 20 9 (2) 4 (2) (1) 20 6 17 22 (2) 2 14(5) 1 6 18(1) 9(7) 3 (3) DC: 6(1) (6) 8 (18) 40 357 TOTAL BRANCHES 113 TOTAL ON-SITES West/Atlanta/Central Division (106) (18) 31 South Atlantic Division (141) Northeast South/Central Division (96) Canadian Division (14) States/ provinces w/o RNA Offices Randstad North America On-sites (113)

Randstad North America revenue distribution 1. 5% 11. 3% 12. 7% 26. 6% 47. 8% West/Atlanta/Central Division South Atlantic Division Northeast South/Central Division Canadian Division States/ provinces w/o RNA Offices

What we offer · Mass-customized concept: Office, Industrial, IT, Creative and Professional · Randstad Inhouse Services: Manufacturing, Logistics, Warehousing STRATEGY: DIFFERENTIATORS: Strong concepts Same people – Sell and service Best people Local people – Local decisions Excellence in execution Right people – Talent focus Superior brands Smart people – Better solutions Must compete with local, regional and national competitors

Our focus · Put more people to work · Implement and effectively use systems · Hire and retain the best people · Continuously improve costs

Put more people to work · Ensure consistency of implementation & execution of strong concepts: Mass-customized and Randstad Inhouse Services · Drive sales activities through our unit structure · Build our business locally first, along with national and corporate business · Manage pricing based on business and location

Implement and effectively use systems · People. Soft system Front office: - Platform for future - Consistency of application to support concepts - Monitoring of performance - Management of pricing and controls Shared Service Center - Customer billing - DSO - Overall platform for process improvements · Leverage technology for transactions and people for relationships

Retain and hire the best people · Hire the best people to match concept expectations · Training and development - New hires - Managers - High performers · Communication · Rewards and recognition · Staff retention

Continuously improve costs · Drive efficiency with technology platform · Shared Service Center - Continue to drive DSO improvement · Improve overall productivity · Leverage purchasing power

Moving forward · Keep our focus and continue to develop discipline · Win right both locally and nationally · Leverage excess branch capacity to grow · Build our brand reputation · Continue strong cost control and improvement

Thank you! Any questions?

Concluding remarks

Disclaimer Certain statements in this document comprise forecasts on Randstad Holding’s future financial condition and results from operations and certain plans and goals. By their nature, such forecasts generate risk and uncertainty because they concern events in the future and depend on circumstances which then apply. Any number of factors can cause actual results and developments to deviate from those expressed in the forecasts stated here. Such factors can be, but are not limited to, general economic conditions, scarcity on the employment market, the variation in the demand for (flexible) personnel, changes in employment legislation, future currency exchange rates and interest rates, future corporate mergers, acquisitions and divestments and the speed of technical change. The forecasts speak only as at the date of this document.