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Netherlands – USG People's Q4 revenues up +12%

04 March 2011

Full year revenues were up by +3% from 3 billion Euro in 2009 to 3.1 billion Euro in 2010 at USG People N.V. (USG.AEX), the multi-brand staffing, secondment and HR services group.

Full year and fourth quarter results for the period ended 31 December 2010 reveal that full year EBITA was up by +37% from 68 million Pounds in 2009 to 93 million Pounds in 2010.

Net income for the full year was up by +188% from 8 million Euro in 2009 to 23 million Euro in 2010.

Q4 revenues were up by +12% from 746 million Euro in Q4 2009 to 835 million Euro in Q4 2010.

Q4 EBITA was up by +45% from 22 million Euro in Q4 2009 to 32 million Euro in Q4 2010.

Q4 net income was up by +140% from 5 million Euro in Q4 2009 to 12 million Euro in Q4 2010.

Q4 reported net income (including one-off effects) was up from -10 million Euro in Q4 2009 to 3 million Euro in Q4 2010.

The Netherlands

The Dutch market continued to recover in the fourth quarter with revenue growing +4%. It marks the first quarter of growth for USG People after a long period of contraction. Start People performed exceptionally well in the final months of the year, far outperforming the market with revenue up by +20%. This is a vast improvement on the previous quarter when revenue grew by +5% at Start People.

Revenue continued at a gradual pace in the services sector and niche markets in which USG People holds a strong position. The year-on-year decline in Specialist Staffing and Professionals continued to narrow but revenue was still -7% lower for the quarter compared to last year.

The gross margin remained stable compared with previous quarters and also compared with the final quarter of last year. Underlying operating expenses were the same as in previous quarters and also virtually the same as in the final quarter last year. One-off costs were 7 million Euro in the fourth quarter compared to 5 million Euro in 2009. Underlying EBITA came to 16 million Euro, the same as last year, and was 4 million Euro higher than in the previous quarter (Q3 2010 EBITA: 12 million Euro).

Belgium and Luxembourg

Revenue in Belgium rose +10% compared to the final quarter of last year. This was an accelerated pace compared to the previous quarter when +6% growth was achieved. Start People and Specialist Staffing, including Unique and Secretary Plus, grew around +10% while Professionals reported a +15% rise in revenue. USG Innotiv (engineers and IT staff) posted a large improvement compared with the previous quarter and USG HR Forces and USG Legal Forces performed exceptionally well once again. USG Financial Forces continued to lag somewhat although there was a clear improvement compared to the previous quarter.

The gross margin was the same as in the fourth quarter last year and increased compared to the previous quarter. Operating expenses were higher as a result of a rise in the number of employees and higher bonus reserves. On balance the EBITA margin rose to 9.3% from 8.2% in the previous quarter. In the fourth quarter of 2010 underlying EBITA equalled 17 million Euro (Q4 2009 EBITA: 13 million Euro or 8.0% of revenue).


In France growth remained high in the final months of the year. Revenue increased by +20% compared to 2009. France was one of the first countries to recover after the crisis. The staffing market there already picked up in the second half of 2009 which makes the year-on-year comparison less favourable percentage-wise.

France achieved EBITA of 4 million Euro (3.0% of revenue) in the fourth quarter (excluding the reclassification of 2.0% business tax). A change in a subsidy scheme which came into effect in December had a negative impact of -0.5 million Euro on EBITA in the fourth quarter. The effect of this is expected to slowly diminish as the drop in subsidy can be charged on to clients.


The performance in Germany was again extremely strong in the fourth quarter. Revenue increased by +40% compared to last year and is the first to approach pre-crisis levels. Revenue growth outperformed the market, confirming the commercial focus and effectiveness of the organisation following the completion of the brand integration in Germany.

The gross margin improved slightly compared to last year but was slightly lower than in the previous quarter, mainly due to seasonal effects.

Operating expenses were higher than a year earlier when expense levels were at a low. Expenses were also higher compared to the previous quarter.

The number of employees rose again in the second half of the year to accommodate the strong growth and amounts for higher variable remuneration were reserved at the end of the year as a result of the improved result for 2010.

EBITA equated to 2 million Euro in the fourth quarter compared to negative EBITA of -1 million Euro in 2009.

Retroactive payments for invalid collective bargaining agreements

The Highest German Labour Court (BAG) has now ruled that December's decision to render all collective bargaining agreements negotiated by the Christian Unions (CGZP) on behalf of temporary employees null and void, shall also apply retroactively back until 2005.

A number of operating companies associated with Allgeier group (acquired in February 2008) applied this collective labour agreement until early or mid-2010.

In 2010 these operating companies started applying the collective labour agreement of BZA (the German Association of Private Employment Agencies) which is affiliated to the European Confederation of Private Employment Agencies (Eurociett).

The aforementioned legal rulings could lead to claims from temporary employees as well as from the German government with regard to the payment of social security premiums. It is still not sufficiently clear at this time what the possible amount of claims from third parties could be, whether USG People is insured against such claims and whether any resulting damages could be recovered from the party from which the relevant operating companies were acquired. For this reason no provision is being taken at this time for possible claims from third parties.

Rest of Europe

Italy achieved growth of +23%, while growth in Spain continued to lag. Revenue was the same as last year. In Spain demand in the staffing market remained low as difficult economic conditions persisted in the country. Growth trends remained strong in the other countries (Switzerland +48%, Austria +64% and Poland +28%).

Rob Zandbergen, CEO of USG People, commented "in the final quarter of the year our revenue grew in every country. The revenue growth of General Staffing in the Netherlands was a very positive development, far outperforming the market with a growth of 20%. 2010 was good year for us in various ways."

"Trends in our markets developed favourably throughout the year and recovery appears to be continuing across the board in the Netherlands and Belgium too. That means that our specialist- and professionals activities can in turn join in with the growth which we are already seeing in the general staffing activities."

"Our balance sheet improved substantially in 2010 and our brand portfolio has become more effective and efficient after combining our activities these past few years. This provides a sound basis for us to further expand our activities. We are well-positioned and focused on growth. We look to 2011 with a sense of optimism."

In early trading USG People's shares were down by -0.47% to 14.80 Euro.


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