2015 Annual report - Jaarverslag.com · The annual report is available in Dutch and English. In the event of ambiguities, the Dutch text shall prevail. ... the company s specialist

FORWARD-LOOKING STATEMENTThis annual report contains certain forward-looking statements regarding the financial situation and results of USG People N.V., as well as a number of associated plans and objectives. Forward-lookingstatements by their nature can provide no guarantee for the future. As a result of various factors actual results may differ from current expectations. These factors may include changes in tax rates, mergersand acquisitions, economic developments and changes in labour legislation. The forward-looking statements in this annual report are current at the time the report was adopted and provide no guaranteesfor the future. The annual report is available in Dutch and English. In the event of ambiguities, the Dutch text shall prevail.

2015 ANNUAL REPORT

OVERVIEW AND STRATEGY— 4

History 5Highlights 6Key figures 7CEO's preface 8About this report 10Social relevance of our work 11Our sustainability policy 13Our business model 15Star brands 17Stakeholders 18Business principles 22Vision, mission and strategy 23Financial calendar 27Ten-year overview 28

GOVERNANCE— 30

Objective of corporate governance 31The Dutch Corporate Governance Code 32Capital structure and protective measure 33General meeting of shareholders 36Executive Board 37Governance structure 38Risk management and control systems 39Supervision 41Supervisory Board 43Report of the Supervisory Board 45Principle features of the remuneration report 49

EXECUTIVE REPORT— 52

Development of our social relevance 53Our environment 56Developments in our market 57Development of financial results 60Developments for our clients 66Developments for our employees 68Developments for our capital providers 72Strategy execution summary 75Risk management 77Sustainability policy: results and ambitions 79Outlook 81

FINANCIAL STATEMENTS— 82

Consolidated financial statements 84

Consolidated income statement 84Consolidated statement of comprehensive income 85Consolidated balance sheet as at 31 December 86Consolidated statement of changes in equity 87Consolidated statement of cash flows 88Notes to the consolidated financial statements 89

Company financial statements 133

Company income statement 133Company balance sheet as at 31 December (before profitappropriation) 133Notes to the company income statement and balance sheet 134

Other data 139

Events after balance sheet date 139Provisions in the articles of association regarding profitappropriation 139Profit appropriation 140Independent auditor's report 141

Financial glossary 148

CONTENTS—

32015 Annual report _ USG People N.V.

4 2015 Annual report _ USG People N.V.

1972

1997

2001

2002

2005

2008

2013

2014

2015

UNIQUE IS ESTABLISHED—Alex Mulder establishes Unique Uitzendburo. The name is thought up by the agency’s first employees and candidates.

UNIQUE IS ESTABLISHED—Alex Mulder establishes Unique Uitzendburo. The name is thought up by the agency’s first employees and candidates.

ACQUISITION OF SECRETARY PLUS—The acquisition of Secretary Plus expands the company’s specialist services. That same year the name of Unique International changes to United Services Group.

ACQUISITION OF SOLVUS—Belgian peer Solvus Resource Group is acquired. The combined entity continues under the name USG People N.V.

UNITED—USG People increases the focus of the organisation by divesting the general staffing activities in six countries and by unifying the brands into the star brands Start People, Unique, Secretary Plus and USG Professionals.

STOCK MARKET LISTING—Unique International acquires Goudsmit, a listed company, which results in a listing on the Amsterdam stock exchange. The listing increases brand recognition and provides more opportunities to invest in scale, services and build up an international network.

ACQUISITION OF START—United Services Group acquires staffing group Start. This expands the range of services with general staffing services in the Netherlands, Spain and Italy. Group revenue exceeds € 1 billion.

ACQUISITION OF ALLGEIER DL—USG People strengthens its position on the German market by acquiring the staffing operations of Allgeier DL.

BUSINESS SOLUTIONS—USG People invests in innovative services and is further expanding its offering of (online) business solutions.

JOINING FORCES—Announcement of intended offer for USG People shares by Recruit. Joining forces will benefit all USG People stakeholders and accelerate the implementation of the strategy.

OVERVIEW AND STRATEGY

HISTORY—


42% of senior management is female

50% of middle management is female

Employee satisfaction

7.4Employee commitment

7.5

CLIENT RELATIONSHIPS—Many trusted long-term professional relationships with clients. We have evolved from being an ‘expert for hire’ into a ‘trusted advisor’. We serve around 1,500 clients daily in virtually every sector in four countries. Client demand for flexible staffing solutions has increased further.

JOINING FORCES WITH RECRUIT—Announcement of intended € 17.50 per share offer for USG People by Recruit. Joining forces with Recruit will benefit all USG People stakeholders and accelerate the implementation of the strategy.

SOCIAL DEBATE—Leading contribution to the social debate about current developments in the job market. We do this in the Netherlands for example via the Werkverkenners (‘Work Explorers’) programme with live events, an online platform, a weekly radio show and newspaper publications in cooperation with FD Mediagroup.

Revenue 8% € 2,551 million

EBITA 26% € 109.4 million

Leverage ratio1.7 ≥ 1.2

Expense ratio (% of revenue) 16.6% 15.6%

USG PEOPLE GOES INCLUSIVE —Placement of 13 people further removed from the job market within USG People in the Netherlands

≥≥

≥


HIGHLIGHTS—


in thousands of euros unless otherwise stated 2015 2014

Revenue 2,550,667 2,355,032EBITA 71,674 73,544Underlying EBITA 109,384 86,721Operating income 63,793 67,173Operating cash flow 70,010 71,098Net income 19,845 25,855Dividend - 12,953Equity attributable to equity holders of the company 484,778 477,104Investments in property, plant and equipment 6,460 6,498Investments in intangible assets 12,417 12,105Market capitalisation at year-end 1,393,620 755,575Total number of shared issued at year-end 81,118,761 80,957,360

Average number of employees (FTE)- indirect personnel 4,861 4,821- direct personnel 68,478 58,031

Number of branches 727 763

RATIOS EXPRESSED AS PERCENTAGESEBITA / revenue 2.8% 3.1%Underlying EBITA / revenue 4.3% 3.7%Operating income / revenue 2.5% 2.9%Net income / revenue 0.8% 1.1%Equity / total assets 37.8% 39.1%

Leverage ratio 1.2 1.7

PER SHARE IN EUROs(based on average number of shares outstanding)Net income 0.24 0.32Operating cash flow 0.86 0.88Dividend - 0.16Shareholders' equity 1) 5.98 5.89Share price at year-end 17.18 9.33Highest share price 17.33 14.10Lowest share price 8.28 7.47

1) Based on the number of shares as at 31 December


KEY FIGURES—


2015 was a special year in the history of our organisation – the year inwhich we announced that we are joining forces with Recruit. If Recruit’soffer for our shares, which was announced on 22 December, is declaredunconditional, USG People will continue as part of a globally operatingorganisation. This is a new milestone in our history. Since the companywas publicly listed in 1997 our organisation’s revenue has grown from€ 284 million to € 2.6 billion. We experienced a period of strong expansionfollowed by an exceptional period of economic crisis, from which weemerged stronger thanks to our resolve. Joining forces with Recruit willenable us to once again accelerate our growth and advance thedevelopment of our position on the European mainland. It provides us withthe opportunity to execute our existing strategy faster.

THE EXECUTION OF OURSTRATEGY YIELDED A VERYSATISFYING RETURN IN 2015.THE DIRECTION WE AREHEADING WITH A FOCUS ONTWO TRACKS LED TO ABOVE-AVERAGE GROWTH AND ASHARP IMPROVEMENT INACTUAL RESULTS.—Rob Zandbergen,Chief Executive Officer


CEO'S PREFACE—


The execution of our strategy yielded a very satisfying return in 2015. Thedirection we are heading with a focus on two tracks led to above-averagegrowth and a sharp improvement in actual results. The first track – ourfocus on commercial and operational excellence – has led to a directimprovement in our results. The measures taken in this area also result ina structural increase in our future profit-generating capability.

Satisfying progress was also made in the second track. In cooperationwith our online business solutions (OBS) subsidiaries and with Solvus welaunched many new initiatives and projects for our clients, both at the starbrands and within the OBS subsidiaries. The good direct results weachieved have been accompanied by the ongoing digitisation of ouroperations and services.

Our focus on operational and commercial excellence has led to highergrowth and a sharp improvement in underlying profit. We are currentlygaining market share in each of the four countries in which we operate. Atthe same time the profit we generate has risen sharply. The annualrevenue of our group increased by 8% in 2015 to € 2.6 billion andunderlying EBITA rose by 26% to € 109 million. Revenue increased by 10%in the Netherlands and Belgium, where each of the four star brandsachieved growth in their own market segment. In France, whereStart People is mainly active, revenue grew by 7% while the revenuegrowth of Unique and Secretary Plus in Germany was a combined 3%. Byeffectively managing operating expenses we were able to achieve the risein revenue while expenses increased only slightly. As a result the EBITAmargin as a percentage of gross profit (the conversion ratio) rose to 21.0%in 2015 (2014: 17.6%), an improvement of 3.4 percentage points.

In the field of development and innovation we are continuing ourinvestments in the development of online HR services within the starbrands. Our subsidiaries in online business solutions are assisting in thiswhile investing in the development of new services and in expandingmarkets and their client and candidate network. Many projects werelaunched and executed by our star brands throughout the year, often incooperation with our subsidiaries in online business solutions. Initiativesthat increase the added value of the services we provide our clients aswell as projects aimed at further digitising our processes. In 2015 a largenumber of tailor-made digital solutions were realised to meet the specificneeds of large clients.

The trust in our existing organisation and future development is alsoexpressed in the annual Great Place to Work trust index. Our rankingimproved in 2015 for the second consecutive year to 74% from 70% in2014 (early 2013: 66%). The ongoing upward trend confirms the positivedevelopment of our organisation. This is characterised by the high level ofambition and is largely driven by the local entrepreneurial spirit of theoperating companies. Creativity and a focus on results go hand in hand to

best support the mission and strategic operational targets – balancingaccelerating growth and a good return with innovation in a rapidlychanging environment. Building on our enterprising corporate culture andour proven capabilities, we want the best people in our sector to be eagerto choose USG People and proud to work for our organisation. In 2015 wetook an important step towards achieving that objective by combining thestar brands in the various countries to accelerate growth with a clear jointmission and ambition.

The economy in our markets is gradually growing and most countries onthe European mainland expect a slight acceleration of growth in 2016 and2017. This, along with the growing preference of many of our clients tohave a more flexible staffing organisation, provides favourable marketcircumstances. The continuation of economic growth also has afavourable effect on our services that pick up later in the cycle, such asthe services we provide to SMEs, placements for specialist positions inlate-cyclical sectors and recruitment and selection for permanentplacements.

Our organisation is in excellent shape and market conditions aredeveloping favourably. Using our strong foundation, with the right peopleand the right means, we are ready to switch into a higher gear. Joiningforces with Recruit will provide a unique opportunity for this that willenable us to optimise the return we achieve for all our stakeholders.

2016 is a year I look forward to with great confidence. Expectations for themarkets are good and we have the capacities at our disposal to accelerateand continue to innovate. That is just what we plan to do in 2016. I wish tothank all our stakeholders – our employees, clients, shareholders and allother partners – for their contribution to the success of our organisation,not only in 2015 but also throughout the years from the moment theorganisation was established up to now on the eve of our next stepforward.

Rob Zandbergen, Chief Executive Officer

24 february 2016



This annual report provides an account of the development of ouractivities in 2015. Our governance is focused on representing the interestsof all our stakeholders well. We are connected to our stakeholders and arehighly committed to transparency. This constitutes a starting point for ourreporting. In this integrated annual report we not only provide legallymandatory information but also information on the development of theinterests of our company’s stakeholders, including our contribution to thesociety in which we live and the environment.

RELEVANT THEMESOur strategy, trends in society and dialogue with stakeholders form thebasis when determining the subjects we report on. This is based on theadded value they provide to the various stakeholders and theircontribution to the continuity of the company. The materiality of possiblesubjects is evaluated with internal representatives of our stakeholders.The importance of the most relevant and high-impact subjects isdetermined based on their assessment.

Stakeholders generally selected themes that are associated with our day-to-day operations, e.g. customer satisfaction and financial performance.In addition a great deal of importance was also given to our governance,with topics such as transparency, compliance and ethical conduct beingprioritised. They also attach great importance to themes that will enableus to continue to stand out in the future. These include innovation, ourinvolvement in the development of the job market and the long-termemployability of people.

CONNECTING WITH OUR STAKEHOLDERSWe are constantly exchanging views with all of our stakeholders in order toknow and respond to their needs with the aim of improving the job market.That means regularly assessing whether we can provide new added valueand monitoring whether our services meet the expectations of thestakeholders and whether they are in line with current market trends anddevelopments.

We engage in dialogue with our stakeholders each and every day. We areconstantly consulting with clients, works councils, suppliers andcolleagues. We organise meetings for the specific purpose of encouragingdebate and dialogue, not only for our employees but also for clients,shareholders and other relations. We use these meetings to ask focusedquestions and present the participants with dilemmas. Examples of suchmeetings were the job market debate for the HR community, roundtablesessions in a smaller setting with clients and relations, and conferenceswith shareholders and analysts. We are also a member of networks andprofessional organisations, in contact with policymakers and politicians inThe Hague and Europe, and consult with unions and regulators.

For the materiality analysis we held talks within our organisation (withdirectors, account managers of the star brands, the works council andothers) and asked them to indicate how important certain subjects are forthem, their clients and other stakeholders. We validated the outcome ofthe materiality analysis with the outcome of stakeholder dialogue andother documents, such as customer and employee satisfaction studies.

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a. Innovationb. Commercial resultc. Transparencyd. Customer satisfactione. Employee satisfactionf. Long-term employabilityg. Ethical conduct and complianceh. Investments in online and mobile distribution channelsi. Digitisation of processesj. Market sharek. Leading contribution to job market developmentl. Human capital developmentm. Impact of our services on societyn. Vitality of our employeeso. Diversityp. CO2 emissions

+


ABOUT THIS REPORT—


Our primary role is to improve the functioning of the job market byconnecting people and work effectively. We do so by developing andproviding services that facilitate the functioning of the labour market andhelp it progress. Our greatest challenge is to maximise the development ofall talents potentially present by developing solutions that make it easierto find, connect and utilise the labour potential. One of the ways in whichwe do this is by putting people in touch with each other; with their talents,motivations and networks; and with organisations. To that end we makeconnections between a diversity of people. In doing so we contributetowards an inclusive, circular labour market with a healthy dynamic,which enables both our society and our economy to function better. Amore effective labour market can accommodate more people. It results inwider and greater participation, which in turn results in a more efficientsociety with greater prosperity for everyone.

We have captured our social relevance under the following headers: jobmarket fitness, diversity and inclusiveness, (social) innovation andenvironment.

JOB MARKET FITNESSFIT FOR THE JOB MARKETTo provide as many people as possible with access to the labour marketand at the same time maintain the competence and involvement of thosealready in work, we have to make serious work of long-term employability.This means investing in healthy, flexible, involved and competent talents,who can continue to make a contribution to society, both now and in thefuture, either within or outside their current employment. This is aboutmaking people versatile and keeping them fit for the job market. Weprovide support to enable them to keep in touch with demand in thelabour market – mentally, physically and in terms of their competencies.Not only do we work on this ourselves, we also assist our clients withissues relating to the long-term fitness of both their organisations andtheir talents. In doing so USG People adds both economic and social valueto people, organisations and society as a whole.

GREATER SUCCESS OPPORTUNITIES FOR ORGANISATIONSWe provide organisations – both large and small – with professionalsupport on a wide range of HR and job market-related issues they arefaced with. In doing so we enable organisations for example to deploy theirstaff, knowledge and capacity more flexibly, thus making them moreversatile. We assist organisations in increasing their innovative strengthwith regard to organising work and at the same time help them todiscover, connect and develop talent. By so doing USG People ‘oils theworks’ of a labour market that does not always run equally smoothly andthus contributes to boosting the prosperity of organisations and of societyas a whole.

USG People has a large and unique network of widely diverse talents whoare looking for suitable work or for new challenges. Organisations can usethis network according to need to ensure the effective, sustainable anddiverse structuring of their staff. This enables organisations to better alignthe composition of their talent structure with current demand and in thelonger term through strategic talent management.

DIVERSITY AND INCLUSIVENESSMORE PEOPLE IN WORKUSG People offers jobseekers a large network of potential employers. As apartner we help people to realise their ambitions and shape how theydeploy their talent. We help people get the best out of themselves and todevelop their talent to the full. When looking for the perfect place to workwe no longer just look at work experience and training, but instead alsoconsider personality traits, cultural aspects, motivation and passions inorder to achieve even better matches. Structuring the recruitment andselection process in this way means we look beyond just the hard criteria.This gives jobseekers varied and sustainable opportunities to findsatisfying work, have a successful career and develop their socialstanding.

We make an active effort to find work for anyone with the ability anddesire to work: young or old, high-skilled or low-skilled, with or without alimitation, from a wide range of cultural backgrounds, male or female, withor without a distance from the job market, and from entry-level toprofessional. In so doing we make an active contribution to a diverse andinclusive workplace.

Strong competi-tiveness

Better functioning economy

More prosperity for people and organisations

More supply and demand for work

Better connection between labour supply and demand


SOCIAL RELEVANCE OF OUR WORK—


(SOCIAL) INNOVATIONA MODERN WAY OF ORGANISING WORKIt is our belief that our day-to-day activities enable us to make a materialcontribution to job security within our society. Terms such as 'employers','employees' and ‘job security’ are increasingly unsuited to how work isorganised nowadays. They imply that an organisation has a fixed flow ofwork, with defined job descriptions, job matrices and hierarchicalstructures, with the work being performed by the employees – also withina fixed framework. However, people are increasingly working on analternate, short-term, flexible, time and place-independent and/or projectbasis – independently or in teams, on more hybrid or conversely specialistassignments, for a single client or multiple clients at the same time. Weare increasingly seeing this happen outside the realm of the existinginstitutions and CLAs, with parties entering into collaboration on abilateral basis. We expect this trend to intensify in the coming years andsee it as our task to facilitate employment against the backdrop of thisdevelopment. In doing so we strive for maximum flexibility in thedeployment of both organisations and people, for example by encouragingour employees to use e-portfolios and providing online courses whichenable them to keep up to date with the required competencies andknowledge. We support businesses by giving them strategic HR advice andby looking with them at current and future developments within their field.

VALUE CREATION THROUGH SOCIAL INNOVATIONUSG People creates value on various fronts: societal, economic and social.As a listed company we are expected to deliver healthy economic resultsand our continuity is clearly dependent on this. However, in the long termour organisation can only achieve good financial results if the marketderives added value from the services we provide – not just financially butalso at a social and societal level. We achieve this in an innovative way,within the social spectrum. We use social innovation to create value forclients, candidates and for society. Examples of this include thegeneration scheme, the 50+ VIP Lounge and the participation partnership– initiatives aimed at providing solutions for staffing relationshipsbetween clients and specific target groups.

INNOVATIONS MAKE THE LABOUR MARKET MORE SUSTAINABLE ANDCIRCULARVarious innovations – many of them technology-driven – help us toimprove the way employment is organised in our society. These so-called‘HR Tech’ solutions help organisations to further enhance the deployabilityand productivity of the working population. A better-organised job marketis not aimed solely at constant productivity growth; it is mainly about howwe can best contribute to the prosperity and wellbeing of all members ofour society. Herein lie challenges in terms of, for example, trainingcourses, employee involvement and job market fitness.

ENVIRONMENTIt is important to us that in doing business we act responsibly towards ourliving environment. Our core activity – connecting people to work – doesnot in itself have a strongly detrimental impact on the environment, but inperforming our activities we do of course make use of things such asbuildings, transportation, office equipment and paper – resources whoseproduction or usage does impact on the environment. We strive to mitigatethe negative impact of our actions on the natural environment as much aspossible.



SUSTAINABILITY MISSION AND STRATEGYSustainability is becoming an increasingly integral part of our operations.It goes without saying that the 'people' component is the cornerstone. Theaim of our sustainability mission is to be a leader in identifying, deployingand developing talent, as well as in getting them to commit to ourorganisation. In other words, maximising human talent is our corebusiness. As such, sustainability is embedded in our organisation’sstrategy. We want to play a prominent role in deploying all available talentin a sustainable way. Looking at talent and the job market this way leadsto a circular, sustainable, mutually beneficial and inclusive job market. Ajob market in which the value creation of all talents is maximised and inwhich people can grow to be sustainably employable, both now and in thefuture.

USG People’s sustainability strategy is aimed at creating value for all ourstakeholders – employees, clients, shareholders, investors, society as awhole and all other stakeholders – in an innovative, transparent andlasting way. Our focus is on what we can do for society and on benefittingin the broad sense of the word.

FIVE SPEARHEADS OF OUR SUSTAINABILITY POLICYThe sustainability policy of USG People is based on ISO 26 000. The sevencore topics this international standard deals with are summarised in fiveUSG People spearheads: being a good employer, sound business practice,diversity, corporate citizenship and environmental impact.

We have selected these five spearheads using the input gained from ourdialogue with stakeholders. These spearheads cover the full range oftopics within the People, Planet and Profit train of thought, with four ofthe five focusing on the People aspect. The culmination of these elementsresults in the lasting impact we have on society, our employees and ourother stakeholders.

BEING A GOOD EMPLOYERUSG People defines ‘being a good employer’ in a broad way. We want to bean innovative, accessible and attractive employer for all our talents – bothour own staff and flex workers; an employer that provides a platform tomaximise their unique talent. We do so by providing both our ownemployees and flex workers with the facilities, conditions and supportthey need to excel and to be and remain versatile. We want to offer them anice and safe place to work. We monitor this in various ways includingthrough our annual participation in the independent Great Place To Work®

survey and by ensuring a safe and healthy working environment. Thesereviews can then serve as input for any changes to our policy, which inturn is measured again. This process enables us to constantly focus onimproving our actions as an employer.

The following areas have been defined under ‘being a good employer’:training and development, vitality and health.

SOUND BUSINESS PRACTICEWe define ‘sound business practice’ as the creation of value with asustainable balance for all stakeholders. This is based on a thoroughcorporate governance structure in which mutual control mechanisms anda team of independent auditors operate, and which is founded ontransparent reporting. We encourage all our indirect employees andexpect them to apply the USG People business principles in their dailywork. Our aim for investors is to achieve an attractive return on theirinvestment and we provide added value for our business partners throughour services. We also want to operate in a responsible and sustainableway in society and the environment in which we live. Not only do wecommunicate clearly with stakeholders about our activities, we also valueand act upon their feedback.

Sound business practice encompasses the following topics: integrity andtransparency, leadership, honest and sustainable procurement, andcustomer satisfaction.

DIVERSITYUSG People views ‘diversity’ as every aspect in which people differ fromone another. This is a broad definition because we believe that peoplecannot be defined based on simply one feature. For USG People it isparticularly important to see every different aspect of a person. These canbe both visible aspects, for example gender or ethnicity, and less visiblefeatures such as working style or character traits. Our aim is to achieve adiverse composition of employees within every level of the organisation,focusing on aspects such as gender and age, as well as on people with an(occupational) limitation or people who are otherwise further removedfrom the job market. Our first and foremost objective is to not focus onpeople’s limitations but rather on their personal talents.

In addition to the composition of our workforce, another important aspectof diversity is combatting discrimination, whereby we aim to eliminatediscrimination, misconduct and inappropriate behaviour.

CORPORATE CITIZENSHIPSocial commitment is a key area of attention for USG People and isfocused on the way in which we give back to the community and society asa whole. USG People wants to contribute to a fair society, for example byvolunteering the services of our employees, facilities and resources. We do


OUR SUSTAINABILITY POLICY—


this mainly by focusing on those areas in which we make a difference:sharing our job market knowledge, making more widespread use of ournetwork and encouraging inclusivity and diversity in the workplace.Everyone has to be able to participate.

We encourage our employees to volunteer for good causes in society andto promote the development of others, for example through ourcollaboration with Stichting Lezen en Schrijven (a foundation focused onimproving literacy in the Dutch society) and Fier (a foundation that helpsvictims of violence within dependent relationships). USG People provideslanguage courses and helps victims of domestic violence enter or re-enterthe job market.

ENVIRONMENTIn addition to our obvious focus on people we also focus on theenvironment, our natural surroundings. Our branches use office space andwe often travel by road. This causes CO2 emissions. We believe it is ourresponsibility to take measures to minimise these emissions. We have setup a CO2-reduction plan for this purpose. In the past few years we haveprogressively lowered our CO2 emissions. Our CO2-reduction plan drew to aconclusion at the end of 2015 and we are drafting a new plan for the2016-2020 period.

OUR SR DASHBOARDThe five spearheads of our SR policy are outlined in a dashboardcontaining five sustainability KPIs that provide an insight into oursustainability impact. The dashboard shows the results of our actions andwhat we find important, and allows us to make adjustments if necessaryor desired. Together with the financial results, these five sustainabilityKPIs complete our dashboard, which reflects how we score in the field ofemployee satisfaction, job market fitness, customer and candidatesatisfaction, diversity and inclusiveness and our CO2 emissions.

With respect to job market fitness we are in the process of developing atool that will include various aspects of this. Examples include trainingand development, competencies, learning ability, flexibility and demandon the job market for specific knowledge and know-how. We will monitorthis based on the amount spent on training both in the entire organisationand per FTE until we have introduced a ‘job market fitness quotient’ in ourorganisation.



USG People has an efficient infrastructure and vast networks oforganisations and candidates in numerous sectors and disciplines.Throughout the years we have gained broad and in-depth expertise in thefield of recruitment, selection and organisation of personnel and we offerthis knowledge to help our clients and candidates find the best solutionsto be able to create a workforce that meets their changing needs in everyway.

It goes without saying that we keep up with technological advances.Innovations and incorporating technology into our existing services arecrucial elements of our current and future business model. Our currentbusiness model consists of three components: accessibility, selection andsolutions.

Stakeholders

• Society• Our capital providers• Our business partners• Our employees

Result

• Social improvement• Return on investment• Added value• Work and development

ARBEIDSMARKT EMPLOYMENT MARKET

Employees

• Reliable partner• Career support• Permanent job• Flexible job• Labour conditions• Development• Learning• Sustainable deployment

Employers

• Online HR solutions• HR consultancy• HR management• Temping and secondment• Outsourcing• Payrolling• MSP, RPO, HRO• Career support• Permanent placement

Matching

Solutions

Accessibility

ACCESSIBILITYThe USG People organisation ensures easy accessibility for its flexworkers and clients. USG People is an organisation of professionals.Experts who are familiar with relevant trends and developments in the jobmarket which they know through and through. They have moderntechnology at their disposal to help them recruit, select and assist theright candidates via the internet, social media and other tools. Thebranches of Start People, Unique, Secretary Plus and USG Professionalsprovide excellent accommodation to keep in personal contact withcandidates at a time that these contacts increasingly take place via theinternet, social media and by telephone.

The branches therefore serve as meeting places where knowledge andexperiences are shared, not only between professionals but also betweenthe USG People star brands and their candidates. This connection ensuresthat best practices can be widely shared and applied. That way knowledgeremains up-to-date, in constant development and safeguarded within theorganisation. And candidates realise that USG People offers themattractive opportunities to shape and further their careers under goodconditions.

Our star brands have access to a widely-branched network of candidatesand organisations. These networks provide companies with access to arich source of human resources across a wide range of specialist areasand provide candidates with attractive job opportunities.

MATCHINGUSG People helps clients select the right candidates for their assignmentsand job vacancies. We have the capacity, expertise and resources to makematches in a wide variety of aspects and disciplines. Our activities rangefrom large volumes to highly specialised individual placements.

The process of selection and matching is based on professional andpersonal aspects. Technological applications are being used more andmore to aid the process of analysing data as a tool for finding the bestmatches. This increasingly concerns not only ‘hard’ competencies but also‘soft’ competencies, such as drivers, culture and passions. That is how weadd value to the selection process. At the same time we work to ensureinclusiveness, sustainable employability, the placement of people who aredistanced from the job market, or placements combined with training. Asthe framework for organising labour continues to widen, other (morecomprehensive) solutions will emerge for labour relations and fororganising staff. For us that means helping our clients achieve the mostbalanced workforce possible, and working together to achieve a morecircular job market.

SOLUTIONSUSG People offers its clients a wide array of solutions to structure theirstaffing organisation effectively, including recruitment and selection, HRconsultancy and management, temporary staffing, secondment,outsourcing, payrolling, MSP, RPO, HRO, project sourcing, outplacement,


OUR BUSINESS MODEL—


career guidance and training. The USG People star brands have vastknowledge about creating a well-functioning staffing organisation. Theyprovide expertise in various specific areas, know the pros and cons of theavailable types of contracts and are familiar with the possibilities andlimitations of applicable laws and regulations. That helps our clientsachieve the most effective staffing organisation possible within theirparameters and needs, a workforce that meets the highest quality andflexibility standards. This reduces and lowers the risks and costs ofineffectiveness and inflexibility.

These three components of our business model deliver added value topeople, companies and society.



Start People positions itself as the high-volume player for both permanent and temporary employees, particularly with large organisations.

Countries

The NetherlandsBelgiumFrance

Segment

General staffing

Employees

direct 79,750indirect 2,914

Revenue

1,571

Unique provides solutions for the SME segment and specialist placements at large organisations.

Segment

Specialist staffing

Countries

The NetherlandsBelgiumGermany

Employees

direct 23,350indirect 1,620

Revenue

763

UNITING EXPERTISE. ACCELERATING AMBITIONS.—

EXPECT MORE—

WORKING FOR EVERYONE—

WORKING ON TOMORROW—

USG Professionals connects the expertise of highly educated professionals with the challenges posed by clients in distinctive areas: Engineering, ICT, Legal, Finance, HR, Science and Marketing, Communication and Sales.

Segment

Professionals

Countries

The NetherlandsBelgiumFranceGermany

Employees

direct 1,900indirect 273

Revenue

144

Secretary Plus offers high-quality and innovative management support solutions and provides assistants for various fields.

Segment

Specialist staffing

Countries

The NetherlandsBelgiumGermany

Employees

direct 1,050indirect 141

Revenue

61


STAR BRANDS—


USG People aims to strike a good balance between the possibly divergentobjectives of the company’s various stakeholders, while achieving well-balanced value creation in the short and long term. We promote theinterests of all the company’s stakeholders, as well as the interests of thesociety as a whole. The basic principle in this respect is value creation forall stakeholders that is both economically sustainable and sociallyresponsible.

We organise stakeholder dialogue on a regular basis, to discuss a widearray of topics and developments in the job market with a diverse group ofstakeholders. This dialogue ensures that USG People is able to respondeven quicker and more effectively to the different stakeholders’ needs anddevelopments and – if necessary – adjust its business model accordingly.

USG People is convinced that maintaining good relations with all thecompany’s stakeholders is crucial as it means that all stakeholders canbenefit from their involvement with our organisation in a fair way. Themain USG People stakeholders are our employees, flex workers, clients,suppliers, the government, our financiers society at large.

OUR EMPLOYEESUSG People is about people. The success of the company therefore largelydepends on the performance of our employees. The efforts andcompetencies of the individual employees, as well as the connectionbetween employees and the way they work together determine theresults, development and further growth of USG People. It is in this beliefthat we constantly invest in being a good employer. Sustainableemployability and, more specifically, the maximisation of talent play a keyrole in this. Sustainable employability has to do with the question of how‘job market fit’ someone is. We believe it is important to invest in flexible,involved, competent and healthy employees. Maximising talent has to do

with someone’s motivation, enthusiasm, education and development.Employees who help to further their development and that of USG People,but who also continue to develop their relevant knowledge andcompetencies for the job market in a broad sense. USG People offers itsemployees a stimulating work environment and facilitates theirdevelopment. This provides employees at all units and layers of theorganisation with possibilities to develop their talent. Our humanresources policy and processes are aimed at facilitating this as best aspossible.

SELECTION AND DEVELOPMENTUSG People attracts employees who possess the knowledge andcompetencies needed to perform their job and which fit into our corporateculture. USG People hires employees not only to fulfil a certain positionbut also to help them further their development and careers.

The use of qualified, motivated and trained employees is crucial forensuring the sustainable growth and further development of USG Peopleand our employees.

ONBOARDINGAll new employees follow an onboarding programme focused largely onthe mission, vision, strategy, ambitions, values and culture of USG Peopleand its star brands, as well as on the requirements linked to theemployee’s position.

TRAINING AND EDUCATIONThese days employees, and that includes USG People employees, must beflexible to stay connected to the job market and the required knowledgeand competencies. Sustainable employability, and particularly trainingand education, play a key role in this. USG People considers it importantthat employees are aware that they themselves are responsible for theirown development. The range of training and educational courses we offerhelps us raise awareness of this among our employees. The training andeducation of our employees also fulfill an important role withinUSG People to achieve and maintain having the right people in the rightjobs. The training and educational courses on offer play into the ambitionsand needs of young talents, while at the same time ensuring that older,more experienced employees are able to maintain their level of knowledgeskills and to share these with younger generations.

PERFORMANCE MANAGEMENTEach indirect employee of USG People participates in the performancemanagement process according to an annual cycle of planning,performing and assessing. At the start of the year targets are set inconsultation with each employee both with respect to competencydevelopment and company results. Progress is assessed midway throughthe year and the employee’s development and results achieved are

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Mission & Values


STAKEHOLDERS—


assessed at the end of the year. For part of our staff this review nowincorporates 360-degree feedback, meaning that not only the manager butalso colleagues and other peers provide their feedback. The ultimateassessment, as well as the employee’s potential, is important input foridentifying talent in our organisation.

LEADERSHIP DEVELOPMENT AND TALENT MANAGEMENTUSG People aims to achieve leadership based on trust and responsibilitywith scope for personal leadership, whereby the strategy is put intopractice and leads to results.

USG People’s talent development programmes are focused not only onstrengthening leadership but also on promoting personal development inthe respective position and career. USG People implements an integratedprogramme approach for the development of senior and middlemanagement in order to promote the advancement to key positions insenior management.

USG People aspires to structurally fill at least 80% of its seniormanagement vacancies through internal promotions.

ORGANISATIONAL CULTUREThe standards and values that are at the core of the organisational cultureof USG People are more than just words. They are values that areexpressed in our day-to-day actions and in the way we do business.

Our business principles are: commitment to results, passion, involvement,professionalism and progress. We also measure how our employees scoreon the competencies and conduct associated with the businessprinciples.

These business principles serve as a guideline for the way we work. Thesecore standards and values are put into practice in our day-to-dayactivities. Our basic responsibilities towards our stakeholders are leadingthis respect.

OUR FLEX WORKERSUSG People provides flex workers with a link to the job market. We helppeople achieve their professional ambitions and shape their career. Weoffer flex workers attractive opportunities to shape their careers undergood conditions and to further their professional development.

Our extensive network of clients and the development possibilities towhich USG People has access offer attractive opportunities for people toachieve their full potential. USG People uses its years of expertise to helppeople do what they do best and develop their talent. This provides themwith versatile and sustainable opportunities for a satisfying job,successful career and the development of social status.

USG People is focused on people. Helping more people find a job is notlimited to people who can be placed relatively easily. USG People is alsoincreasingly helping more vulnerable people and those with feweropportunities in the job market. This category includes people with alimitation, younger and older people, the long-term unemployed and otherpeople who are further removed from the job market.

OUR BUSINESS PARTNERSUSG People considers its business partners to be 'partners indevelopment'. They contribute to our development and USG Peoplecontributes to their development. Our most involved business partners areour clients, our suppliers, our co-suppliers and various governmentinstitutions. In its relations with these partners USG People aims toachieve high-quality services while focusing on working together.

OUR CLIENTSIn helping our clients arrange their human resources better, USG Peopleprovides the following services:• access to a large network of candidates;• recruitment and selection tools to help find the right candidate for a

vacancy;• flexibility in the staff base, making the organisation more versatile;• lower risks by removing or reducing capacity problems;• lower costs by adopting an efficient HR organisation;• advice on diversifying the workplace and devising solutions to achieve

an inclusive organisation, focusing on Social Return On Investment(SROI) and people further removed from the job market;

• vital and sustainably employable flex workers.

USG People provides its clients with a wide range of solutions to set uptheir HR organisation effectively, for example in the field of:• recruitment and selection;• HR advisory and management;• placement, secondment;• outsourcing;• payrolling;• MSP, RPO, HRO;• project sourcing;• outplacement;• career advice and support;• training.

OUR SUPPLIERSThe products and services that are provided by our suppliers are resourcesthat we use in our business activities and in the services we provide to ourclients and candidates. The constant development of these products andservices also contributes to the possibilities for USG People to furtherdevelop its organisation and services. A basic condition in relations with



suppliers is that there is a good balance between quality, competitivepricing and sustainable product development.

USG People’s policy for suppliers is a policy in which partners shouldcontribute to added value, continuity and the sustainability of ourservices. Open and honest communication about social and environmentalaspects is important, while keeping an eye on the chain behind theproduct or service. Environmental aspects are about looking at the impactof the product, service or activity on the environment. Social aspectsconcern labour conditions and SROI.

OTHER STAKEHOLDERSThe government, unions and industry organisations are also stakeholdersin USG People. These authorities influence the frameworks within the jobmarket, each with its own interests. A well-functioning job market is in theinterest of all these organisations. As an employer and an HR servicesprovider USG People aims to be closely involved with these interest groupsto also be able to perform its ‘motor oil’ function with these stakeholders.

OUR CAPITAL PROVIDERSThe financial resources of USG People are provided by investors andfinancial institutions. USG People’s shares have been listed on the stockexchange since 1997, giving the company not only financing from banksbut also access to the capital market. This access to the capital markethas increased USG People’s possibilities to achieve its growth ambitions.By investing in the organic growth of the organisation and in acquisitions,USG People has grown into one of the main HR services providers inEurope. Since it became listed on the stock exchange USG People has onlylaunched issues on the capital market to finance large acquisitions.

HISTORY OF ISSUES

ORDINARY SHARES2002: acquisition of Start € 43 million2005: acquisition of Solvus Resource Group € 230 million2010: post-acquisition of Allgeier € 86 million

CONVERTIBLE BOND2005-2012: acquisition of Solvus Resource Group € 115 million

To reimburse shareholders for their capital investment USG People aimsto achieve a return that reflects their investment risk. USG People iscommitted to transparent communication towards investors, and alwaysaims to provide a clear and up-to-date picture of developments in thecompany. This helps investors make founded projections for expectedrisks and returns.

Shareholder returns are visible in the form of a company dividend andthrough the development of the share price on the stock exchange. Thelatter is partly determined by investor supply and demand, which in turn issometimes determined by market sentiment which USG People does notdirectly influence, such as global economic conditions. USG People isfocused on maintaining continuity and the company’s performance whichdetermine value development in the longer term.

development of dividend in euros1 dividendhistorie

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In financial terms USG People aims to grow revenue and profit. In the shortterm this growth is influenced by the economic cycle during which periodsof economic growth can alternate with periods of contraction. That is whygrowth objectives need to be considered as averages over the duration ofthe entire cycle. The strategic objective for profitability from 2014 is forEBITA to average 6.0% of revenue during the cycle.

The aspired results also offer a framework for the expected returns oninvestment for our shareholders, striking a good balance with the benefitsfor the other USG People stakeholders. The targeted results provide scopefor a consistent dividend distribution along with investments in furtherdevelopment and growth.

USG People invests a great deal of time in its relationship withshareholders and banks. We want these groups to understand ourbusiness, believe in our vision for the future and strategy and above allhave faith in our leadership. The longstanding relationship with our banksis a good example of our aim to build successful, sustainable relationshipswith our stakeholders. Such sustainable relationships contribute tostability in the continuity of our financing, also in times when economicconditions are less favourable

To provide a good insight into the state of affairs and to increase faith inour company, USG People communicates clearly and regularly aboutmarket developments, operational and financial results and strategicprogress. The board attaches a great deal of importance to beingtransparent to financiers and accessible to investors while at the same



time paying a lot of attention to its relationships with investors andshareholders.

Meetings and roadshows are organised to provide clear and proactivecommunication to investors, analysts and the financial media. Everyquarter the publication of earnings is accompanied by a presentation foranalysts and the media. The publications and presentations are also madeavailable on the USG People website. The board members andrepresentatives also take part in conferences and roadshows for investorswhile conference calls and meetings are held to maintain contact withshareholders.



The business principles form the core of the culture and identity we aim toachieve through our mission and vision. We strongly believe in oursegmented market approach and operate in the conviction that theresponsibility we give to our star brands enables them to develop andgrow successfully. The business principles represent the shared valuesthat we wish to express throughout our organisation in our day-to-dayactivities.

COMMITMENT TO RESULTSThe creation of value at USG People is largely determined by ouremployees. They are the driving force behind the results which theorganisation achieves for all our stakeholders. At USG People a result-driven culture serves as the basis for good returns and continuity. Beingcommitted to results is a key quality to possess in the services sector,where competition is fierce and high expectations are placed oneveryone’s individual contribution. The commitment of our employees toachieving results helps our clients succeed. Our daily focus is on ourclients and candidates and we think in terms of opportunities andpossibilities. Our starting point is that there is always room forimprovement. The services are always our main focus and the needs of ourclients and candidates are our primary consideration. Being proactive,responsible and driven are therefore important parts of employeedevelopment. They allow us to create a winning mentality and fosterdedication and focus in our work.

PASSIONAchieving the perfect match results in passionate employees who, in turn,ensure the right matches. The passion exuded by our own employeesshows our clients and candidates that USG People achieves the rightbalance between the candidate’s ambitions and competencies, on the onehand, and the client’s needs, on the other – a crucial element of ourservices. We are enterprising, hard-working professionals who arepassionate about what we do. Passion is the energy that propels us.Passionate people have the courage to transcend existing borders andconvey their ideas and proposals with conviction and enthusiasm. Theyare able to back up their ideas and choices with arguments, resulting insuccessful relationships with clients and candidates. This is the essenceof the USG People culture.

INVOLVEMENTA fundamental aspect of the value provided by USG People is ouremployees, i.e. our human capital. Bringing these people together createsa maximum level of knowledge and expertise within our organisation, twoof the most essential value drivers in the services we provide.

Another fundamental aspect in USG People’s operations is therelationship between employers and candidates. Our right to exist isdefined by our ability to achieve the best possible match between supply

and demand in the job market. This starts with building sustainablerelationships with clients and candidates.

PROFESSIONALISMThe specialised knowledge and expertise of our employees and thetargeted manner in which it is applied is a defining factor that sets ourservices apart. Our employees set high standards for themselves and eachother. A high level of expertise and focus on quality are basic driverswithin USG People. Our organisation has a great capacity for learning andis able to adapt to new developments. This enables us to apply knowledgeand insights directly to our own practice and this benefits the services weprovide to our clients.

USG People aims to apply new ways of working and more efficientorganisational structures. Placing trust in the professionalism andeffectiveness of our employees are preconditions that ensure ourorganisation functions well.

PROGRESSWe aim to constantly increase our added value. Innovation andtechnological applications play an ever-increasing role in our ability tostand out in the services sector. Adopting new technologies contributes tothe development of our added value and makes us more competitive. Thedrive of our employees to grow promotes and facilitates this development.We believe that everything can be better and more effective and efficient.That is why we strive to achieve a culture that fosters innovation andcreativity. A culture of dialogue, experimentation and constantimprovement. We are constantly looking for the best way to serve ourclients and candidates, identifying opportunities to innovate and comingup with possibilities for new products and services.


BUSINESS PRINCIPLES—


VISIONPeople make all the difference, each with their own unique talent andpassion.

MISSIONIt is our mission to help people find the job that suits them best while atthe same time providing our clients with the best possible employees. As apartner in employment we are the link to the job market for an ever-growing number of people and organisations. We use the expertise wehave gained over the years to offer a multitude of opportunities foremployment, learning and career paths.

We use our know-how to help our clients connect with the best candidateswhich, in turn, allows them to operate as effectively as possible in themarket with well-qualified employees. The market is constantly changingunder the influence of economic developments, on the one hand, and theavailability of qualified employees, on the other. We believe in talentedpeople who can make a difference when they are employed in the rightplace. It is this combination that enables us to attract the best candidatesand connect them to the right jobs.

Our aim is to hold a leading position in the markets we have selected.USG People’s core activities provide a robust basis and unique startingpoint to support this objective. Our specialisations lend themselves well tofurther development and growth, both organic and through acquisitions.Using our know-how we expand on our leading positions in these specificmarkets and niche markets and create added value for all ourstakeholders. Innovation and new ways of working help our organisationcontinue to develop and make it more sustainable.

STRATEGYOur strategy follows two tracks. On the one hand we are focused onconstantly improving our commercial and operational excellence in ourcore activities, while on the other we are investing in the development ofmainly technology-driven services that provide high added value in thefield of human capital. These are two complementary tracks that directlystrengthen our competitiveness and ensure the transformation to a moredigital and technology-driven USG People. At the same time USG People isfocused on combining top-notch technological solutions with personalservices.

Our activities are distinctly positioned within four specialist star brands:Start People, Unique, Secretary Plus and USG Professionals. The starbrands are focused on a specific market segment which theirinfrastructure – i.e. their distribution network, client and candidatenetworks, technology applied and expertise at hand – is fully gearedtowards. This enables us to provide the best solutions in each marketsegment. The positioning is concentrated on four neighbouring core

countries: the Netherlands, Belgium, France and Germany. Thesecountries form a market currently valued at almost € 60 billion, whichprovides fundamentally good opportunities for growth and healthyreturns.

We invest in technology-driven concepts and business solutions withwhich we strengthen our innovative potential and lay the basis for the nextstage in the development of our organisation. Our strategy leads to themaximisation of talents, financial and social value creation for allstakeholders, and therefore to a sustainable business model.

STAR BRANDSdistinct business models of the star brandsThe business models of the star brands are distinctively designed. Theorganisation, network, expertise, technology applied and services of eachbrand are aimed at providing added value in each star brand’s specificmarket segment.

STAR BRANDS

Start People is focused on providing solutions with large volumes offlexible employees, often for large organisations. The solutions are aimedat helping clients organise flexible staff in a cost-effective way.Start People maintains a vast network of talented individuals with a widerange of profiles and has a client network across all sectors. As an HRbusiness partner Unique is mainly focused on clients in the SME segmentand on providing specialist office placements at large organisations. Thecomposition of Unique’s talent network is diverse and services areprovided in every sector. Secretary Plus and USG Professionals arefocused on specific groups of talents. Secretary Plus provides HRsolutions for management support and USG Professionals is focused onproviding solutions for highly skilled talents in the expert fields ofengineering, finance, HR, ICT, legal, marketing and communication, andscience.

BUSINESS SOLUTIONSBusiness solutions are propositions with strong technology-drivenscalable applications that allow us to develop new business and earningsmodels that are also aimed at acting as enablers for the digital


VISION, MISSION AND STRATEGY—


transformation of our star brands. These business solutions allow us tohelp our clients organise their human resources in a smarter way.

BUSINESS SOLUTIONS

SolvusSolvus is mainly focused on contingent workforce management (MSP),career mobility, talent acquisition (RPO) and performance & developmentmanagement. Solvus offers an overall concept to increase customers’resilience and flexibility in all HR dimensions.

Online Business SolutionsAdver-Online provides a cloud-based online SaaS portal with HR andrecruitment tools and solutions such as assessments, job marketing,employer branding, an applicant tracking system (ATS), training, HRconsultancy services, timekeeping, and payrolling of permanent andflexible employees.

Adver-Online also has a holding in Speakap, which offers private, cloud-based social platforms for organisations, focused on use on smartphonesand tablets. Within these social platforms, also known as enterprise socialnetworks (ESNs), organisations can find and share knowledge and data ina simple and very modern way.

Endouble gives clients the opportunity to make their recruitmentprocesses more effective and efficient by using tailor-made talent-acquisition platforms such as ‘werkenbij’ websites (recruitment websites),making recruitment processes measurable, improving the findability ofvacancies through search engine optimisation (SEO) and search engineadvertising (SEA), setting up and running online recruitment campaigns,and using social recruitment for example by means of its own Refurls tool.

Blue Carpet provides clients with community-based total talentmanagement solutions aimed at identifying, attracting, developing andsecuring talent for organisations. At the same time, using the Ixxer TalentProfiel (also called ePortfolio or competency passport) Blue Carpetenables individuals – varying from students, jobseekers, permanent orflexible employees to self-employed professionals – to shape personal

insights and develop their own talents and therefore remain employablefor the long term.

Connecting-Expertise is an online software services provider that offersan advanced Vendor Management System (VMS) including an onlinemarketplace to support MSPs. A VMS structures the entire businessprocess between clients and various providers of all types of flexible staff,such as staffing agencies, self-employed people with no staff (so-calledzzp’ers) and consultancy firms. The process supports the full chain fromrequest, vacancy and project placement by the client to invoicing. Theonline marketplace enables clients to make assignments, projects orvacancies available in the open market in an automated way.

POSITIONINGThe Start People, Unique, Secretary Plus and USG Professionals starbrands and new business solutions provide us with a wide array ofsolutions that create added value for all our clients’ and talents’ HRissues. Whether it be smart and effective online recruitment, a singleplacement or the full management of a client’s (flexible) workforce, smallor large volumes, unskilled or highly skilled employees and irrespective ofthe type of contract under which an employee is made available or workson assignments.

Our existing organisation – with the networks we have built up and theknowledge we have acquired – and the use of new, technology-basedservices are mutually reinforcing in their development and in the creationof new shared opportunities to provide added value to the solutions weoffer clients and talents.

Accordingly our organisation is focused on commercial and operationalexcellence within the existing operations, on the one hand, and thedevelopment of solutions that offer higher added value to our clients in theform of innovative human capital business solutions, on the other.

STRATEGIC OBJECTIVES• Strengthen existing leadership positions• Expand exposure to growth markets• Expand high added-value concepts

We are following two tracks to reach our strategic objectives and, in doingso, are working on both our short-term and long-term organisationalobjectives. The first track is mainly aimed at further developing ourexisting business models, with a strong focus on operational excellenceand a further expansion of professionals. The first track is also aimed atdeveloping more practical and accessible solutions in the field of HRmanagement.



The main focus of the second track is to innovate our business models andmake them scalable, e.g. through the transformation to online distributionand services. This track is also focused on developing new, high-valueservices in the field of (online) recruitment and selection, talentdevelopment and long-term inclusive employability. The second track isalso aimed at creating innovative solutions for organisations to structurethe recruitment, selection and deployment of labour in a smart way, e.g.via MSPs and RPO.

strengthen exisiting leadership positionsOur stand-alone strategy is primarily aimed at strengthening our marketpositions within our existing geographical scope. Even though theprovision of online services is not bound by national borders, the starbrands are not looking to expand their geographical reach at this time.New concepts, developed in-house or acquired, are mainly meant to aidthe further development of the services we provide for clients and talentsin the existing countries, resulting in a greater competitiveness, higherrevenue and robust returns.

The four countries – with a total workforce of more than 80 million peopleand a level of penetration of flexible labour that is still relatively limited –provide an attractive playing field to realise growth. The flexibility of thejob market is expected to continue to grow. This will create more demandfor our services in these countries, including facilitating independentprofessionals, organising and matching micro jobs and ensuring long-term, inclusive employability within a workforce that is not expected toexpand. Organisations are also expected to increasingly use onlineservices for their staffing organisation as well as more comprehensivebusiness solutions such as MSPs and RPO. These are areas where we canprovide a great deal of added value with our expertise and infrastructure.

Our focus within the existing infrastructure will continue to be onoperational excellence and efficiency. A lot of progress has been achieveddue to the implementation of our strategic refocus in October 2011:expense levels have been reduced and have structurally improved.

We remain focused on further increasing the versatility of the organisationand flexibility of the cost structure. We continue to modernise ourdistribution channels with a view to achieving an integrated distributionsolution consisting of brick-and-mortar branches and online and mobilechannels for clients and talents. Technology is and will remain animportant focal point of development and investment, for both the furtheroptimisation of processes and the development of innovative, scalableservices.

increasing exposure to growth marketsTo expand our exposure to growth markets we are mainly investing ininnovative propositions with a strong technical component. Technologycan help us provide new services from within our existing network with ashort time-to-market and generate added value. Internet-related andtechnological applications are currently quite small scale but the growthpotential using such applications can be exceptionally high. TheNetherlands, but also Belgium where we have a strong presence, is idealfor the development of a more online-oriented business model due to thehigh use of the internet and mobile phones. Successfully developedbusiness models and best practices are then applied in the neighbouringcountries where we are present as well as in countries outside of ourexisting area of operations.

expanding high added-value conceptsIn a number of our operating countries flexible employment services suchas temporary staffing and secondment have evolved into a more maturestage. Combined with various changes to legislation and regulations, suchas the introduction of equal pay, this has put pressure on the pricing of themore traditional services we provide. At the same time we are witnessingstrong demand in the market for the management of all types of flexiblelabour and HR expertise in the field of contingent workforce management

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and talent acquisition. This provides us, as an established provider ofhuman capital services, with a good environment to enter into fully-fledged strategic partnerships with clients.

There are many areas where we can use our expertise and organisation toprovide added value to organisations. These include consulting oneffective (online) recruitment and selection policies; selecting and placingspecialised or highly skilled employees; staffing projects; managing ortaking over HR and recruitment processes; managing the entire flexibleworkforce including independent professionals, the long-term inclusiveemployability of staff, and the management, planning and development oftalent.

We do this by expanding USG Professionals and Secretary Plus and bydeveloping service-oriented HR solutions, including through Solvus andthe Online Business Solutions.

STRATEGIC RETURN TARGETSOur target is for an average EBITA margin for the entire group of 6%throughout the economic cycle. This target is achieved by means ofeffective capacity utilisation, efficient operational processes, a flexiblecost structure and a relative increase in the activities that provide highadded value.

This return target is managed by closely monitoring productivity peremployee, the percentage of fixed costs compared to adjustable costs andthe share of the various propositions in USG People as a whole.

STRENGTHENING THE BALANCE SHEETWe mainly finance the investments needed to execute our strategy fromour operating cash flow. In the past financing was only raised in thecapital market to finance large strategic takeovers. We have creditfacilities amounting to € 450 million at our disposal. These facilities offercomfortable scope to invest as and when opportunities arise.

In managing our debt position we pursue a cautious policy bearing in mindthe cyclical nature of our activities. The target is for the total leverage ratio(net debt / EBITDA) to not exceed 1.0. In other words, net debt may not bemore than one time EBITDA in the past four quarters.

The bank facilities provide USG People with stable financing. They havebeen extended by a syndicate of banks with which USG People has builtup a long and intimate relationship over the years, thus ensuring stabilityin the continuity of the bank financing.

In addition to the bank facilities USG People has facilities in place thatmake it possible to sell trade receivables to finance working capital. Thatmeans that the operating cash flow does not have to be reduced when

working capital increases and that it offers sufficient scope to execute thestrategic plans.

We achieve these balance sheet targets by using the free cash flow tolower the total net debt in absolute terms and by monitoring the strategicreturn targets, as discussed above.



29 APRIL 2016Publication of first-quarter results (before market opens)Analysts’ conference call on first-quarter results

12 MAY 2016Annual General Meeting of Shareholders

29 JULY 2016Publication of second-quarter results (before market opens)Analysts’ meeting and press conference on second-quarter results

28 OCTOBER 2016Publication of third-quarter results (before market opens)Analysts’ conference call on third-quarter results

3 MARCH 2017Publication of fourth-quarter and annual results (before market opens)Analysts’ meeting and press conference on fourth-quarter and annual results

This calendar applies until the offer made by Recruit has been declared unconditional.


FINANCIAL CALENDAR—


amounts in thousands of euros unless otherwise stated 2015 2014 20132012

RESTATED1) 2011 2010 2009 2008 2007 2006

CONSOLIDATED INCOME STATEMENTRevenue 2,550,667 2,355,032 2,270,031 2,441,954 3,244,772 3,098,630 3,001,134 4,024,965 3,887,681 3,536,836Growth 8.3% 3.7% -7.0% -24.7% 4.7% 3.2% -25.4% 3.5% 9.9% 78.8%Operating income 63,793 67,173 41,300 -110,206 -4,386 43,094 760 116,665 243,859 194,206Growth -5.0% 62.6% 137.5% -2412.7% -110.2% 5570.3% -99.3% -52.2% 25.6% 202.6%As a percentage of revenue 2.5% 2.9% 1.8% -4.5% -0.1% 1.4% 0.0% 2.9% 6.3% 5.5%Net income 19,845 25,855 -26,058 -191,179 -40,159 15,293 -30,965 16,885 140,011 110,853As a percentage of revenue 0.8% 1.1% -1.1% -7.8% -1.2% 0.5% -1.0% 0.4% 3.6% 3.1%Operating cash flow 70,010 71,079 26,186 29,037 104,609 105,569 226,317 276,510 201,389 165,151Dividend - 12,953 11,268 9,566 13,336 12,432 - 37,688 51,581 45,445

CONSOLIDATED BALANCE SHEETNon-current assets 818,076 859,888 843,935 903,993 1,127,701 1,148,359 1,172,434 1,200,115 1,086,958 1,066,482Current assets - current liabilities -92,461 -121,168 -124,732 -164,300 -271,445 -137,972 -138,920 26,721 107,030 -2,729

725,615 738,720 719,203 739,693 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753

Equity 484,778 477,104 458,335 488,924 695,253 740,244 638,812 669,777 684,684 574,420Non-controlling interests 2,328 1,824 1,249 551 542 554 529 1,402 1,028 1,129Non-current liabilities 238,509 259,792 259,619 250,218 160,461 269,589 394,173 555,657 508,276 488,204

725,615 738,720 719,203 739,693 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753

OTHER KEY FIGURESEquity / total assets 37.8% 39.1% 38.5% 36.4% 42.0% 44.2% 38.9% 34.0% 34.9% 30.2%Current assets / current liabilities 0.83 0.75 0.73 0.73 0.66 0.79 0.77 1.04 1.14 0.90

Number of shares as at 31 December (nominal € 0.50) 81,118,761 80,957,360 80,483,677 79,715,875 78,448,505 77,702,427 70,682,433 70,633,400 63,679,719 63,117,700

PER SHARE (NOMINAL VALUE € 0.50) IN EUROsNet income 2) 0.24 0.32 -0.33 -2.41 -0.51 0.20 -0.44 0.24 2.21 1.76Operating cash flow 2) 0.86 0.88 0.33 0.37 1.34 1.38 3.20 4.29 3.18 2.62Dividend - 0.16 0.14 0.12 0.17 0.16 - 0.58 0.81 0.72Equity 5.98 5.89 5.69 6.13 8.86 9.53 9.04 10.31 10.75 9.10

1) The divestment of the General Staffing activities and changes to IAS19 'Employee benefits' resulted in a restatement of the 2012 figures2) Based on average number of shares outstanding


TEN-YEAR OVERVIEW—


amounts in thousands of euros unless otherwise stated 2015 2014 20132012

RESTATED1) 2011 2010 2009 2008 2007 2006

CONSOLIDATED INCOME STATEMENTRevenue 2,550,667 2,355,032 2,270,031 2,441,954 3,244,772 3,098,630 3,001,134 4,024,965 3,887,681 3,536,836Growth 8.3% 3.7% -7.0% -24.7% 4.7% 3.2% -25.4% 3.5% 9.9% 78.8%Operating income 63,793 67,173 41,300 -110,206 -4,386 43,094 760 116,665 243,859 194,206Growth -5.0% 62.6% 137.5% -2412.7% -110.2% 5570.3% -99.3% -52.2% 25.6% 202.6%As a percentage of revenue 2.5% 2.9% 1.8% -4.5% -0.1% 1.4% 0.0% 2.9% 6.3% 5.5%Net income 19,845 25,855 -26,058 -191,179 -40,159 15,293 -30,965 16,885 140,011 110,853As a percentage of revenue 0.8% 1.1% -1.1% -7.8% -1.2% 0.5% -1.0% 0.4% 3.6% 3.1%Operating cash flow 70,010 71,079 26,186 29,037 104,609 105,569 226,317 276,510 201,389 165,151Dividend - 12,953 11,268 9,566 13,336 12,432 - 37,688 51,581 45,445

CONSOLIDATED BALANCE SHEETNon-current assets 818,076 859,888 843,935 903,993 1,127,701 1,148,359 1,172,434 1,200,115 1,086,958 1,066,482Current assets - current liabilities -92,461 -121,168 -124,732 -164,300 -271,445 -137,972 -138,920 26,721 107,030 -2,729

725,615 738,720 719,203 739,693 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753

Equity 484,778 477,104 458,335 488,924 695,253 740,244 638,812 669,777 684,684 574,420Non-controlling interests 2,328 1,824 1,249 551 542 554 529 1,402 1,028 1,129Non-current liabilities 238,509 259,792 259,619 250,218 160,461 269,589 394,173 555,657 508,276 488,204

725,615 738,720 719,203 739,693 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753

OTHER KEY FIGURESEquity / total assets 37.8% 39.1% 38.5% 36.4% 42.0% 44.2% 38.9% 34.0% 34.9% 30.2%Current assets / current liabilities 0.83 0.75 0.73 0.73 0.66 0.79 0.77 1.04 1.14 0.90

Number of shares as at 31 December (nominal € 0.50) 81,118,761 80,957,360 80,483,677 79,715,875 78,448,505 77,702,427 70,682,433 70,633,400 63,679,719 63,117,700

PER SHARE (NOMINAL VALUE € 0.50) IN EUROsNet income 2) 0.24 0.32 -0.33 -2.41 -0.51 0.20 -0.44 0.24 2.21 1.76Operating cash flow 2) 0.86 0.88 0.33 0.37 1.34 1.38 3.20 4.29 3.18 2.62Dividend - 0.16 0.14 0.12 0.17 0.16 - 0.58 0.81 0.72Equity 5.98 5.89 5.69 6.13 8.86 9.53 9.04 10.31 10.75 9.10

1) The divestment of the General Staffing activities and changes to IAS19 'Employee benefits' resulted in a restatement of the 2012 figures2) Based on average number of shares outstanding



One of the main purposes of good corporate governance is to gain andmaintain the trust of all stakeholders – trust in the way business ismanaged and supervised, trust in risk control, trust in financial and non-financial reporting and therefore trust in the company as a whole.Integrity, transparency and clear communication are the vanguards ofsound corporate governance at USG People. In compliance with legislationand regulations, the company will provide all shareholders and all otherparties at the same time with the same information on topics that couldhave a significant impact on the share price, subject to exceptionsstipulated by law. Strict compliance with the basic principles of integrity,transparency and clear communication are high on USG People’s agenda.The internal processes are devised as carefully and transparently aspossible, ensuring that these values are adhered to throughout theorganisation.

In recent years USG People has adjusted and further enhanced itsgovernance model. The Dutch Corporate Governance Code from 2003 andsubsequent amendments made in 2008, as well as existing legislation inthe field of corporate governance, have played an important role in thisrespect. The Executive Board and the Supervisory Board believe that theexisting corporate governance structure, as expanded on in more detail inthis section, is the most suitable model at this time. With the exception ofaspects of the corporate governance structure that can only be adaptedwith the approval of the General Meeting of Shareholders, the ExecutiveBoard and Supervisory Board will only adjust the corporate structure if it isin the best interests of the company. Any such changes will be expandedon in the annual report.

This complete section can be considered to be the corporate governancestatement as referred to in Article 2a of the Dutch Decree on additionalrequirements for executive reports (Vaststellingsbesluit naderevoorschriften inhoud bestuursverslag) as last amended as of 1 November2015.

USG PEOPLE N.V.USG People N.V. is a publicly listed limited liability company governed byDutch law and subject to the Dutch large company regime. The ordinaryshares of USG People are listed on Euronext Amsterdam. The corporategovernance model is a two-tier management structure, with an ExecutiveBoard responsible for the day-to-day management of the company and aSupervisory Board whose role is to supervise the Executive Board’spolicies and the general affairs of the company and its associatedbusiness. The two bodies operate independent of each other and areanswerable to the General Meetings of Shareholders. The USG PeopleArticles of Association were most recently amended on 1 February 2011.

GOVERNANCE

OBJECTIVE OF CORPORATEGOVERNANCE—


USG People applies a policy in line with the Dutch Corporate GovernanceCode (hereinafter referred to as ‘the Code’) (see the Government Gazetteno. 18499 of 3 December 2009 for the text of the Code). The Code is basedon the ‘comply or explain’ principle. That means that companies listed onthe stock exchange are required to explain in their annual report how theycomplied with the Code and to give a motivated account of the principlespertaining to the Executive Board and Supervisory Board as well as of anybest practices which have not been applied.

DEVIATIONS FROM THE CODEAt various General Meetings of Shareholders USG People renderedaccount for its compliance with the Code and – if necessary – provided aduly substantiated explanation why the organisation deviates from theCode in the case of a certain provision. In doing so USG People is incompliance with the Code. The following provides an explanation of thebest practice provision from which USG People deviates.

The new remuneration policy for the Executive Board for the period2015-2018 came into force on 1 January 2015. The remuneration policycomplies with the provisions of the Dutch Corporate Governance Code,with the exception of severance pay upon termination of an ExecutiveBoard member’s contract of employment in the event of a takeover of thecompany resulting in a change of control. In this case the terminationpayment shall amount to twice the fixed gross annual salary, includingpension contribution, increased by one-twelfth of this fixed gross annualsalary, including pension contribution, for each year of employment withUSG People. However, this termination payment shall not exceed threetimes the fixed annual salary including pension contribution. This is atvariance with provision II.2.8. of the Code. USG People applies this policyregarding severance pay in the event of a change of control in recognitionof the long-term employment of members of the Executive Board andmoreover, given the shareholder structure of USG People, to protect theirposition as directors of the company.

In addition the remuneration policy for 2015-2018 deviates from theprovision that shares granted must be held for at least five years withoutfinancial compensation (best practice provision II.2.5). Instead of thisrequirement stipulated in the Code the members of the Executive Board ofUSG People are required to hold at least twice their fixed gross annualsalary in USG People shares during their full term of employment.USG People opts for this shareholding requirement to ensure an alignmentwith the interests of shareholders.

USG People gives its shareholders the opportunity to follow analystmeetings, analyst presentations and presentations to (institutional)investors and the media. These meetings and presentations areannounced in advance via the website. A meeting/presentation isoccasionally held that shareholders cannot follow in real time. This is at

variance with best practice provision IV.3.1. In such cases shareholdersare informed about the meeting/presentation via a press release.

GOVERNANCE

THE DUTCH CORPORATEGOVERNANCE CODE—


At 31 December 2015 the authorised share capital of USG People stood at€ 100,000,000, consisting of 200,000,000 shares with a nominal value of€ 0.50 each. The shares are divided into 100,000,000 ordinary shares and100,000,000 preference shares. The issued capital at that date was€ 40,559,380.50, consisting of 81,118,761 ordinary shares. Each ordinaryshare represents one vote.

BUYBACK OF OWN SHARESAt the General Meeting of Shareholders on 7 May 2015 shareholdersauthorised the Executive Board – with the approval of the SupervisoryBoard – to buy back USG People shares for a period of 18 months as from7 May 2015. Shares may be purchased under any agreement, includingprivate transactions and transactions effected through the stockexchange. The buyback of own shares is subject to the followingconditions:• the buyback may not exceed 10% of the issued share capital on 7 May

2015; and• the price must be between the nominal value and 110% of the stock

market

Documents

2015 Annual report - Jaarverslag.com · The annual report is available in Dutch and English. In the event of ambiguities, the Dutch text shall prevail. ... the company s specialist