the netherlands
USG People holds the number two position in the Netherlands with a market share of around 20%. We offer a wide array of services with our strong, well-established brands. Start People is active in the field of general staffing while other brands, such as Secretary Plus and Unique, are focused on specific target groups and/or market segments. We hold a strong position in the office segment but also have leading positions in the technical market with USG Innotiv, Technicum and USG Energy. Furthermore, we have a strong position in the student segment with ASA Student and Ad Rem Young Professionals. In 2010 the activities of Content and Unique were combined and StarJob merged with Secretary Plus. Joining forces strengthened the market position of the office specialists, while the number of branches was trimmed as a result of network consolidation. Our brand policy provides strong brand recognition and attracts both candidates and clients. It also ensures a wide spread and high degree of specialisation in the mature Dutch market.
In 2010 the Dutch market showed signs of recovery that became more and more widespread throughout the year. Demand for temporary employees gradually picked up. On the whole, recovery in the Netherlands lagged somewhat behind neighbouring countries due to the particular features of the Dutch market. While staffing services in other countries are predominantly focused on the industrial sector, the more mature Dutch staffing market has a large share in the administrative sector. Demand in the industrial and transport sector also picked up in the Netherlands early in the year and was at first primarily driven by an upturn in exports. The services sector – where recovery is more gradual – showed signs of upturn later. Recovery in this sector was delayed somewhat by lower public sector demand in view of government austerity measures. For the full year market volume expressed in terms of hours was up 5% compared to 2009.
In April Start People started reporting revenue growth compared to a year earlier, while most specialist and professional brands were not able to exceed 2009 levels until the final months of the year. September marked the turning point for us in the Netherlands as a whole as growth was reported after 27 consecutive months of contraction. In the final months of the year our revenue in the Netherlands grew again compared to the previous year.
For us, recovery started setting in somewhat later than the market due to our different mix with its larger share in the services sector and focus on SMEs. These market segments pick up later in the economic cycle than the large industrial companies and the transport sector.
USG People in the Netherlands posted revenue of € 1.217 million for 2010, down 8% compared to 2009 (€ 1.330 million). The drop in revenue resulted in a drop in EBITA. EBITA totaled € 33 million in 2010 (2009: € 50 million). Profitability improved in the course of the year due to the recovery and cost savings. In the second half of the year the EBITA result equaled that of last year.
BelgiUM and Luxembourg
USG People is the second-largest player in Belgium and Luxembourg with a market share of just under 20%. Start People and Unique are mainly focused on temporary staffing in the industrial, transport and services sectors. In addition USG People has compiled a strong portfolio in the office segment over the years. This segment is characterised by highly attractive structural growth potential. Through our specialist (staffing) brands, we provide highly qualified office staff in the field of finance, management support, legal, human resources and reception services. USG Innotiv also provides us with a strong position in the technical professionals segment in Belgium, focusing mainly on engineers and IT professionals. Furthermore our specialist Express Medical is a well-established name in the healthcare sector. USG People’s portfolio consists of an effective mix of volume and specialisation which ensures healthy growth potential and above-average profitability in the mature Belgian and Luxembourg markets.
The Belgian staffing market grew 12% expressed in terms of hours in 2010. The number of staffing hours in the industrial sector started growing from January compared to 2009 after nine consecutive quarters of contraction as lower volumes had been posted in the sector since October 2007. Staffing volume in the services sector showed positive growth for the first time in May 2010, reversing twenty months of negative volume growth. Compared to the industrial sector this was a relatively short period of time and the amplitude of the cycle was also much less pronounced in the services sector. At its low point in 2009 the industrial sector posted a drop in terms of staffing hours of 39%, while the drop was just 19% in the services sector.
In April USG People’s revenue in Belgium exceeded the year-earlier level. Slight revenue growth was posted in the second quarter compared to 2009. Contrary to the situation in the Netherlands, recovery was immediately visible nearly across the board. Start People, Unique and the other specialist brands recovered surprisingly fast. Professionals followed suit slightly later in the year due to the nature of the activities. Demand for IT and financial professionals, as well as for construction-related services initially lagged behind. In the course of the year many of USG People’s Specialist Staffing and Professionals brands, including Secretary Plus, USG Legal Forces and Express Medical, exceeded their pre-crisis highs.
USG People’s revenue in Belgium and Luxembourg totalled € 676 million in 2010, up 3% compared to 2009 (€ 655 million). Profitability improved as underlying EBITA increased by 15% from € 46 million in 2009 to € 53 million in 2010. EBITA as a percentage of revenue was 7.8% compared to 7.0% in 2009.
France
In positioning its network in France USG People opted for dominant positions in most active economic regions, often located in the vicinity of large cities and in the north and east of the country. In 2008 and 2009 this focus resulted in the closure of many branches in locations elsewhere, where the level of economic activity is generally lower. Many branches were also combined, thus creating branches that are generally bigger. This creates the additional efficiency and flexibility needed in cyclical movements in demand for temporary staffing services. This concentration has given USG People an effective position that sets itself apart from its main rivals in the French market. USG People’s portfolio in France consists of three brands: Start People provides general staffing services and USG Financial Forces and Secretary Plus are specialised in qualified office staff. Start People’s activities are largely focused on local companies, often small and medium-sized, with the large client segment being served by separate teams. This makes it possible to fully utilise the expertise of the different disciplines. USG People wants to focus more on specialist services in France too. In 2010 Secretary Plus was represented by five branches in large cities like Paris and Lyon, while USG Financial Forces currently has 10 branches.
The industrial-oriented French staffing market was one of the first to recover after the crisis period in 2008 and 2009. The staffing market grew by 15% in 2010 compared to year before. USG People’s revenue equalled € 494 million, 17% higher than in 2009. Within the specialist activities revenue at Secretary Plus in 2010 increased to € 2.5 million (up 40% compared to 2009). After an exceptionally difficult period in the financial sector USG Financial Forces still managed to achieve a slight 3% rise for the year. Revenue amounted to € 8.4 million in 2010.
germany
In 2010 USG People took a key follow-up step on its strategic roadmap for Germany. A sizeable restructuring saw to it that the fragmented position of USG People in Germany was turned around from 14 to three brands: Unique, Secretary Plus and Technicum. The brands that emerged from the acquisition of GeKo Zeitarbeit in 2007 and the former Allgeier DL in 2008 were combined and integrated into USG People’s international brands. This strengthened the position in Germany and laid a solid foundation for the further expansion of the activities and for efficient growth.
The German staffing market bounced back strongly after the crisis in 2008 and 2009, posting the strongest rise of all European countries. The German staffing market was the first to exceed the peak level reached before the crisis. The economic climate improved substantially in the course of 2010 and the number of flexible employees in the country is approaching the one-million mark for the first time ever. USG People generated revenue of € 271 million, a rise of 28% compared to the year before and we outperformed the market from the second quarter of the year onwards. The market grew around 30% in the second half of the year while USG People achieved growth of around 40%. The results show that the commercial clout has clearly improved as a result of the integration. Revenue was up 26% at Unique and 32% at Technicum. Revenue at Secretary Plus was even up 60% compared to 2009, far exceeding pre-crisis levels.
Spain
USG People’s network and portfolio in Spain were thoroughly restructured in the past years. Branches were combined and closed, particularly in secluded areas where there is little economic activity, and brands were merged. In addition the activities of Start People and Unique were merged. The combination will continue operating under the name Unique and focus more and more on regional small and medium-sized enterprises. Unique operates in segments including services, industrial, transport and logistics, agriculture and catering. Furthermore our SYS Outsourcing brand is active in the outsourcing of reception and logistic services and of commercial and administrative projects. We are also focused on specific markets in Spain, including HR and secretarial services.
In 2010 the Spanish government took its first tentative steps towards lifting restrictions on temporary staffing in the construction sector and for the government. The European directive on temporary agency work, which entered into force in 2009, requires for restrictions to be lifted by the end of 2011. This provides attractive long-term growth opportunities for the Spanish market.
The Spanish employment market showed few signs of recovery in 2010. Problems with government financing and low demand in the construction and catering sectors had a tight hold on the economy. Unemployment stabilised but stayed at a very high level compared to other European countries. USG People’s revenue in Spain equalled € 195 million, up 2% compared to 2009. The result improved from the year before but remained negative due to the low level of revenue.
Italy
Italy is one of the growth markets for USG People, both as regards general staffing and for the further introduction and growth of specialist services. In 2008 we introduced our first specialist brand in Italy when we rolled out Unique. Since then Unique has been operating in Italy from its four branches in Milan, Rome, Turin and Bologna. Unique is predominantly focused on the higher end of the services sector. Specialist brand Secretary Plus will open its first branch in 2011.
In 2010 USG People’s revenue rose 24% to € 132 million (2009: € 106 million). Unique, which commenced operations in 2008, posted revenue of € 2.4 million in 2010, up 53%. Italy offers extremely good long-term perspectives for USG People’s growth strategy.
austria, switzerland and poland
USG People provides general staffing services throughout the countries of Austria, Switzerland and Poland. These countries are now also taking the initial steps towards a more specialist portfolio. Secretary Plus was launched in Austria in 2009 and in 2011 the brand will also be rolled out in Switzerland, where activities were launched in the medical sector in 2010. This way these countries too are creating a more profitable mix and better growth perspectives.
The total contribution of these countries equalled 3.7% of group revenue (2009: 2.5%). Combined revenue increased 47% in 2010 to € 115 million. Austria and Poland posted the strongest growth, up 57% in each country compared to 2009. In Poland there were even a few months when growth exceeded 100%. Revenue in Austria was 18% higher than the pre-crisis peak level seen in 2008 and Poland also was once again near pre-crisis levels, despite sharp drops in 2009. The staffing market in Switzerland also picked up in 2010 after a long period of slowdown.