J.P. Morgan Ultimate Services Investor Conference · IT staffing market is 3-4 times larger than...

J.P. Morgan Ultimate Services

Investor Conference

Max Messmer, Chairman and CEO

Keith Waddell, Vice Chairman, President and CFO

November 12, 2014

© 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/Disability/Vet.

Company Background

First and largest staffing firm specializing in accounting

and finance positions

Founded in 1948 as franchised business

In 1986, acquired franchisor with no company operations

and began process of acquiring all franchises

Opened offices worldwide and launched new professional

staffing divisions

In 2002, entered the risk consulting

and internal audit business through

formation of Protiviti

2


Accolades

FORTUNE® magazine

―Most Admired

Companies‖

(1998‒2014)

―Best Places to Work‖ lists around the world

―World’s Most Ethical Companies‖ (Ethisphere, 2013)

FTSE4Good Responsible

Investment Index (2008‒2014)

Barron’s 400 Index

FORTUNE® WORLD’S MOST

ADMIRED C O M P A N I E S 2 0 1 4

3


Global Operations

Europe

Austria

Belgium

France

Germany

Italy

Luxembourg

Netherlands

Switzerland

United Kingdom

Middle East

UAE

South America

Brazil

Chile

North America

Canada

United States

More than 400 offices in 20 countries worldwide

4 4

Asia-Pacific

Australia

China

India

Japan

New Zealand

Singapore


76%

24%

Robert Half Revenue Mix* – By Geography

United States International

*Q3 2014 Staffing Revenues

5


3%

4%

5%

12%

24%

Robert Half Revenue Mix* – International

Percentage of Global Staffing Revenues

Continental Europe

Canada

Asia-Pacific

U.K. International

*Q3 2014

6


1%

3%

4%

4%

Other

Robert Half Revenue Mix* –

Continental Europe

Percentage of Global Staffing Revenues

Germany

Belgium

France

Continental Europe

12%

*Q3 2014

7


Robert Half Revenue Mix* –

Business Segments

78%

14%

8%

Permanent Placement

Risk Consulting and Internal Audit

Temporary and Consulting

*Q3 2014

8


Our Brands

Specialized Staffing

Project Skills

Project Management

and Deliverables

Recruiting

9


Business Strategy

Value proposition: Only full-time jobs require full-time staff

Clients value specialization in professional segments

Middle-market accounts are smaller, less price-sensitive;

clients are demanding, quality is key

Internal staff must possess

specialized skills

Protiviti provides consulting,

project management, co-sourcing

and outsourcing capabilities

10


Accounting Staffing Demand

U.S. job growth for financial analysts, accountants and auditors

is expected to outpace the national average between 2012

and 2022

Bookkeeping, accounting and auditing are among the top 15

occupations with the highest projected job growth between

2012 and 2022

– BLS Occupational Outlook Handbook, 2014-2015 Edition

11


Accounting Staffing Demand

The hiring of new accounting grads by public accounting firms

reached an all-time high in the 2011-2012* academic year

89% of firms anticipated hiring the same number or more the

following year

– AICPA 2013 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits

* Latest available data

12


Technology Staffing Opportunity

IT staffing market is 3-4 times larger than accounting staffing

32% of companies plan to add IT staff in 2014 (Computerworld Forecast 2014)

Low unemployment for IT positions (U.S. Bureau of Labor Statistics, Q3 2014)

– Computer and information systems managers: 1.3%

– Network and computer systems administrators: 1.8%

– Computer systems analysts: 2.2%

Application development demand migrating to middle-market

companies

Growing need for customized software,

websites, mobile, social media

13


Unique Robert Half/Protiviti Delivery Model

We provide world-class consulting and specialized

staffing, under one roof, at an attractive price

Global and regional consulting firms that compete with

Protiviti lack the flexible resource capabilities of our

staffing operations

Staffing competitors lack in-house access to Big 4

consulting methodologies like those of Protiviti

Staffing Consulting Blended

14


Marketing Approach

Positioned as quality leader through advertising and PR activities

– Thought leadership: published content, salary research, other resources

National and local content and email marketing

Social media (Facebook, Google+, Twitter, LinkedIn, YouTube, etc.)

National radio and print advertising; direct mail

Online recruiting sites

Local outdoor advertising:

billboards and mass transit

15


Alliances at a Glance

Exclusive Career Partnership

16

http://www.aicpa.org/

http://www.alanet.org/


20-Year Revenue History

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Robert Half F&A/Accountemps Other Services

Compounded Annual Growth 20 years ended 12/31/13

14.1% $4.2B

17


1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

20-Year Cash Flow From Operations

$309.2M

Compounded Annual Growth 20 years ended 12/31/13

16.4%

18


Return on Equity (20-Year Average & Q3 2014)

*Through Dec. 31, 2013

24.9%

35.0%

20-Year Average* Q3 2014

19


Post-Recession Operating Performance

Following each of the prior 10 recessions in our

company’s 66-year history, Robert Half emerged stronger

than ever

18 consecutive quarters of double-digit growth in net

income and earnings per share on a year-over-year basis

RECOVRY

20


U.S. Temporary Jobs as Percentage of Total Jobs Created

Prior U.S. Recovery vs. Current Recovery

Recovery Comparisons

2.8%

9.8%

Sept. 2003 - Mar. 2008 Mar. 2010 - Sept. 2014

Source: BLS and Deutsche Bank

21


Temporary and Consulting Revenue ($ in Billions)

(2001‒Q3 2014)

$2.3

$1.8 $1.7

$2.2

$2.6

$3.1

$3.6 $3.6

$2.5$2.6

$3.1

$3.3 $3.4

$2.5$2.7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

22


Temporary and Consulting Gross Margin % (2001‒Q3 2014)

36.6%

35.6%34.9%

36.0%36.5%

37.0% 37.2%36.7%

34.1% 34.1%

35.2%36.0% 36.2% 36.1%

36.5%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

23


Temporary and Consulting SG&A % (2001‒Q3 2014)

28.9%

32.9% 32.7%

29.0%

27.0% 26.9% 27.0% 27.1%

29.8% 29.9%

28.3%27.7%

27.3% 27.1% 26.8%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

24


Temporary and Consulting Operating Income %

(2001‒Q3 2014)

7.6%

2.7%2.2%

6.9%

9.5%10.0% 10.2%

9.6%

4.2% 4.2%

6.9%

8.3%8.9% 9.0%

9.7%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

25


Permanent Placement Revenue ($ in Millions)

(2001‒Q3 2014)

$189

$100 $95

$136

$219

$336

$444$427

$182

$221

$302

$334$348

$262

$298

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

26


Permanent Placement SG&A % (2001‒Q3 2014)

89.2%

106.8%

97.3%

87.5%

79.7%77.8%

80.6%

85.8%

103.7%

92.0%

88.2%

83.3% 84.3% 84.0%

79.4%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

27


Permanent Placement Operating Income % (2001‒Q3 2014)

10.8%

-6.8%

2.7%

12.5%

20.3%22.2%

19.4%

14.1%

-3.8%

7.9%

11.7%

16.7%15.6% 15.9%

20.5%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

2009

28

2002 2009


Protiviti Revenue ($ in Millions)

(2004‒Q3 2014)

$352

$479

$543 $552 $547

$384 $386

$424$453

$528

$387

$453

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

29


Protiviti Gross Margin % (2004‒Q3 2014)

37.8% 39.8%36.6%

31.6%28.3%

20.8%

25.2% 26.8% 25.9%29.3% 28.4% 28.9%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

30


Protiviti SG&A % (2004‒Q3 2014)

19.9%21.6%

25.5%27.8% 26.9%

28.9% 28.1%25.6%

23.5%21.2% 21.6% 20.3%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

31


Protiviti Operating Income % (2004‒Q3 2014)

17.9% 18.1%

11.2%

3.8%1.3%

-8.0% -2.8%

1.2%2.4%

8.1% 6.8% 8.6%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 mos.2013

9 mos.2014

2009

32


Strong Financial Position

As of 9/30/14

Cash $291 million

Total assets $1.6 billion

Virtually no debt

33


*Through Dec. 31, 2013

**Cash flow from operations net of cash used for investing activities

Cash Returned to Shareholders ($ in Millions)

1 Year* 5 Years*

Free Cash Flow $ 211** $ 951**

Dividends

$ 89 43%

$ 402 40%

Share Repurchases

$ 118 57%

$ 599 60%

Total $ 207 100% $1,001 100%

34


Robert Half Quarterly Dividend

History Since Inception

35

11.6%

CAGR


Share Count Reduction (Millions)

Shares Outstanding

2008 150.9

2009 148.6

2010 146.2

2011 142.1

2012 139.4

2013 137.5

5-Year Reduction 13.4

% Reduction 9%

36


Market Opportunity — Staffing Services

Annual global revenues for staffing industry approximately $400B USD

High number of U.S. job openings in professional/business services

(BLS JOLTS report, Oct. 2014)

Employment services among the 10 U.S. industries expected to add

the most jobs through 2022 (BLS)

Long-term demographics — war for talent, retiring baby boomers

37

Secular demand for flexible staffing;

temp penetration rate at all-time high

We work with less than 10 percent

of target prospects

Middle-market demand for technology

staffing services


Market Opportunity — Protiviti

Solid base of recurring internal audit and financial controls demand

Growing suite of consulting services

– Financial services — regulatory risk and compliance

– Technology privacy, security and controls

Protiviti/staffing blended solutions

38

Thank You

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