Jacques van den Broek - Chief Executive Officer Henry Schirmer - Chief Financial Officer David Tailleur - Director of Investor Relations

Bilal Aziz - UBS Paul Sullivan - Barclays Matthew Lloyd - HSBC Tom Sykes - Deutsche Bank Marc Zwartsenburg - ING Anvesh Agrawal - Morgan Stanley Hans Pluijgers - Kepler Cheuvreux Konrad Zomer - ABN AMRO George Gregory - Exane Rajesh Kumar - HSBC

Thank you very much. Good morning, everybody.

Jacques van den Broek here together with Henry Schirmer and David Tailleur to talk you through our Q3 results and of course handle questions you might have afterwards. So I immediately start Slide 6, which has a few of the headlines as far as we're concerned.

So mixed growth, some slowdown in Europe, but improvement in the US, still very strong in what we call rest of the world leading to an organic growth of close to 3%. And we're very happy with the fact that based on stable margin and good cost management we've been able to improve our EBITA both as a percentage, but also in absolute terms with an ICR slightly above 50%.

So where is the growth still coming from? Our Professionals business doing very well in many markets, Perm still like Q2 13% up, North American business very happy there, we do see good growth in our staffing business being above market with 5%.

Our Professionals business all growing you know say the hard we've done in our Professionals businesses and very happy with where they are and also our Canadian business, 10% of North America back to growth again. Then rest of the world, I flagged that already in the second quarter, is now annualized some 2 billion sort of size of our German business, half of our US business, but growing above average at very decent returns, so definitely a new area of strength for us as a company.

The digital strategy as many of you know, tomorrow we'll have a breakfast where we'll go more in depth with. We just want to share a few highlights because next to managing the business as is on a daily basis, we're very much of course working on our growth for the coming three to five years.

Some highlights here, workforce scheduling. This is where we give a planning proof we've charged to our clients, we connect with them to app technology to basically plan themselves, we do design our current Inhouse businesses, but also towards clients which don't have an Inhouse because they don't want to buy that service what are slightly smaller, is now implemented in nine countries.

Basic starting country was France, they've now implemented it at close to 300 clients, basically their existing clients and they're now moving to prospects, so very much moving towards prospects, we feel will fuel our growth into '19 and beyond. Data driven sales, the support for our consultants where they know where demand is, where they can combine one visit with the client with another prospect that on their mobile shows that there is opportunity.

We started this service or this development in main markets US, France and the Netherlands, but made in their home system in their back office. Now, we have a system in Belgium that's going to travel around the world and that we'll implement in six countries going forward, helping our consultants to be more effective in sales.

Candidate engagements, as you know we work under the assumption that clients will less and less be actively looking for a job, so we really need to engage them very proactively. We call that dialogues, so in 12 countries we now have various initiatives with chatbots, some off the shelf third party, some we made ourselves.

Chatbot is very young technology, so we're still experimenting here, but there is a lot of traction going on, a lot of learning going on for us and our consultants. And then finally, again aimed at candidates, video and digital assessments, this enables our candidates to connect with us wherever and however they want either at home or through mobile.

Now, active in 21 countries, again making us more accessible for candidates around the world, which we think is crucial going forward. Going to Slide 7, looking more in depth at markets, I already said how happy we are with the returns, the positive growth of all our Professionals businesses in the US, great compliments goes out from me to our collogues.

You know our runs of Professionals business were aimed at financial profiles, had a struggle, but we've seen consistent improvement throughout the year, now leading to positive growth in this quarter. Our Staffing and Inhouse business 5% growth, above market, Inhouse still doing very well there and our Canadian market, the Canadian market was hit by legislation basically variance of the use of pay in the Toronto area, but still we bounced back into growth this quarter and that leads to a stable above average group return of 6.2%.

The Dutch market, very disciplined on pricing, as you know, nothing new there, but we're still closing the gap to market here, our Staffing & Inhouse business is quite stable 2% growth, our Professionals business at 15% growth above market absolutely and Perm for the group of 13%, but also on a Dutch business growth of 9%, so an improvement there If we turn to slide 8, our French business, what we see here is that the growth slowdown is in our large accounts, partly our own doing, as you know, we shared a large client in automotive, we do see weakness in this sector, that's most of the weakness we're seeing also in France. Our SME space is still growing, roughly 50% of our branches still see positive growth.

So it's a mixed picture, but overall slight deceleration. And but, again, here, like our Dutch business, for example, our Professionals business are still up quite good, mainly driven by our medical business uphill in medical.

Our EBITA margin goes down as a percentage, but that's wholly or almost wholly due to the lower CICE subsidies we got here and also the lower growth is still - in Q1 we still saw a high growth, so we could in a way compensated in absolute terms that's tougher now. Our German business, also automotive, automotive has a sector in Germany is even more important than it is in France.

And so you see the sequential drop from 6% growth and 2% minus from Q2 to Q3. 75% is due to this automotive weakness and you're seeing many of our clients going out with warnings on trade tensions and also the fact that there are some unclarity about diesel legislation, which you know, meant for them that they had to tone down their volume production and of course, they use flexible label also to better their own costs there.

So you see it in our Staffing and Inhouse business predominantly, again, Professionals very stable in our German business. EBITA margin going down as a result of this and we will take out cost in this quarter in Germany to adjust to the lower growth.

Belgium, again, very stable performer in our market growth going down, but still above market also here again very good Perm. As you know, in many of our large staffing businesses a few years ago, we started also selling Perm through our staffing consultants, works very well for us as he does in Belgium than many countries and a quite stable and above group average high margin.

Italy, very tough comps for last year this time around, probably around 25% growth, but still 7% growth this quarter. Again strong Perm growth, same story as Belgium and good returns.

There has been some design new legislation in Italy, it's actually too soon to call the actual effects we don't see it yet in our markets, but we will definitely keep you updated once we know more. By the way, the same goes for France on the changes of CICE into another scheme, too early to talk about the details here.

We move to slide 10 on Iberia, our Spanish business, again, tough comps last year, high teens, good growth 3%, great cost management there where there EBITA percentage went up. Our Portuguese business, however, is down.

Other European countries, again, tough comps almost everywhere, but still an improvement in EBITA margin, so you know, quite happy with the way our colleagues in all these markets are handling the current market circumstances. We move to slide 11 of Rest of the World, as I said, it's been a region for us, we're there now for a little bit more than 10 years, but certainly now we do see this becoming a very, very important market sector or call it region for us.

Our Japanese business, we see always good growth, but also this Japan is a market with low unemployment and our management has become very diligent on pricing, so margin is increasing there and also our results then go up also based on good growth in Perm. Australia business way above market as far as we can judge with 14%, so well done there.

Our Chinese business up 6%, Latin America, which for us is predominantly Argentina and Brazil growing at 30%, 35% in Q, so stable there. Also in this business, we see Sourceright, so RPO in a Brazilian business becoming a part of our sector.

Most of this region is very much Perm lead and therefore for the whole region Perm is up 16% driving our results. Then we go to our global businesses, starting with Monster, as we mentioned in Q2, this business is financially under control for us, we are increasingly using the Monster database and the Monster capabilities for our Randstad consultants, you know it is very much part of our strategy to create a bigger data lake accessible for our consultants.

And over time also using the data out of this data lake to talk to our clients and friends we see in the labor market availability of talents. But at the same time, you know, that's investment.

So the balancing act for Monster is very much, the old business, the job postings being on the pressure and the new businesses gaining traction in the Monster topline. New products such as Monster Studios which we launched at HR Tech in Las Vegas last month where clients can basically present themselves through their own videos, their own clips to a tight labor market.

That was met with quite some enthusiasm, also the Resume Builder something we got from RiseSmart, where we allow our cameras to create a very effective social media profile and they're paying for that. So that's great, very promising stuff, but still a lot of work to be - to really, yeah, revamp this business as such.

Let me go to Sourceright, on the first instance you might say, okay, so 14% growth in Q2 and now 8%. We do feel that in Q4, given the pipeline of clients, new clients were currently landing here, they're very optimistic that the growth here will increase in Q4.

So that's very much what we see currently around the globe. And with that I take you to Henry to update you on the financials.

Okay. Thanks, Jacques.

So it's my pleasure now to take you through the financial results and then move to Q&A after that. Let's go straight to the P&L on page 13.

If you look down –revenue down to EBITA quarter three year-over-year, and as discussed by Jacques, we reported a competitive revenue growth of 3% in light of slowing macro and staffing market in Europe. It's good to see again the strength of our portfolio coming through, Perm in rest of the world grew double-digit with excellent conversion and North America accelerating growth.

Gross margin came in at 19.8%, down 30 basis points, underlying stable and slightly ahead of guidance. Operating expenses are up 1% year-over-year, well monitored and under control and we've been able to adjust the cost base quickly to changing market conditions and still get up to capture further growth opportunity.

Last but not least, EBITA came in at EUR299 million with 5% EBITA margin, 10 basis points up year-over-year. Quarter three was a pretty clean quarter with just 0.3 extra working days and not an awful lot of tailwind from that side.

Let me also point out that the incremental conversion rate for the last four quarters was about 50% and even higher on quarter three. So now on page 14, we show the gross margin in a bit more detail.

Gross margin is a solid story, on the left you see the quarter three '17 gross margin of 20.1% and the very right bar shows the quarter three '18 gross margin of 19.8%. As mentioned, the gross margin came through underlying table ahead of guidance and 30 basis points below last year.

The fact that year-over-year the gross margin is showing up lower as again mostly related to mix. The bar on the left shows the impact on our Temp gross margin, which is 20 basis points gross margin diluted and 10 of the 20 basis points are due to lower CICE payments and the reminder of the 10 basis points will lead to price mix filly in line with the last quarter.

The bar in the middle shows the positive impact of our fast growing Perm business, 13% growth driving 20 basis points positive mix. It's all fee income and therefore, gross margin accretive.

And lastly, the red bar on the right represents HR services including Monster. And as stated before, Monster is a 100% fee business still in decline and hence it shows up negative mix in the bridge.

Also it's a pure technical effect. Also going forward, we acquired some mix effect at play here.

We always have an eye on gross profit in relation to OpEx to ensure enough benefit is showing up in the EBITA. This reassuring that underlying price environment is stable and even improving in some areas like in France and Japan.

One the next page, page 15, operating expenses, as you know, operating expenses are always getting our full attention, but especially in times of economic uncertainty. And sequentially we reported OpEx coming down from EUR908 million in quarter two, so EUR892 million in quarter three as well as FOREX impact of EUR4 million and EUR19 million organic net OpEx decrease.

Costs are down 2% sequentially and just 1% up year-over-year reflecting the flexibility there for our [ph] cost base. Also productivity will stable year-over-year.

Finding the right balance between tough cost management and investing for growth worked out well in quarter three. And we do our best and do the same thing for the remainder of the year.

It's one of the key to drive the business for leverage going forward. Let me also close the chart with a confirmation that we are fully on track to deliver our cost savings target of 90 million to 100 million annually by 2019 as presented to most of you at the Capital Markets Day in November 2017.

So, on page 16, let me now shed some light where it all means for cash flow and balance sheet. Reported free cash flow for the quarter of EUR220 million, an improvement by 43 million in absolute terms and 24% up year-over-year.

The main driver for the good cash flow was an improved EBITDA to help reduce working capital requirement, which illustrates perfectly the countercylical nature of working capital in our business, and hence, the resilience of our cash flows through economic cycle. The last bullet on the left show status of spending, which increased by 1.5 days on the 12 month moving average mainly due to mix effect.

Note however this was sequentially stable. And on the right hand of the chart, let me go straight on our strong balance sheet, despite our special dividend payment of EUR126 million in quarter three, the net debt came in at only 30 million [ph] higher than last year.

And we reported an improved leverage ratio of 1.2 versus 1.4. Most of you will know that quarter four is traditionally is one of the strongest free cash flow quarters in the year, this time it's all supported by CICE cash in of about EUR100 million.

Our guidance on taxes remains unchanged 23% to 25% for effective tax rate and slightly north of 20% for cash tax rate, and we iterate our guidance for higher free cash flow year-over-year. Now on page 17, let me first summarize the key messages and provide you with an outlook for the full year 2018.

Firstly, the quarter brought competitive topline growth, further EBITA progression and strong free cash flow conversion. Secondly, our digital strategy is well underway and that is our business.

And it's not only helping to rush productivity, it also redefines our way to engage with customers and candidates. Thirdly, we are well positioned to deliver a full year EBITA margin ahead of our last year's 4.6%.

On the right side of the chart, I'd like mentioned the fact that September and October so far grew at a similar pace at quarter three and as far as Germany and France are concerned, we do not expect a return to growth yet. Let me point out that the gross margin for quarter four expected to be modestly lower sequentially, they don't receive CICE for the month of December, the replacement subsidy was after January 2019.

We also expect OpEx to be broadly stable sequentially. In quarter four, there will be an additional 1.1 day impact on number of working days.

Well, that concludes our prepared remarks, and I hope it helped to shed some on our Q3 performance. We're now delighted to take some questions.

Operator?

Good morning, everyone. And just three questions from me please.

And firstly, and just on Germany and clearly quite a lot of noise in the German labor market right now. You see just most of the weakness you saw was tied to the destruction in auto.

So just trying to get sense in the near term outlook given you still expect to be negative in the fourth quarter, what you expect a small pickup, if auto production bounces back or do you feel with the general market is now also slowing. Secondly, in Italy and there has been some regulatory changes over the summer, I'm happy seeing that negatively impact the demand for temps within that region.

And finally on gross margins, your underlying temp margin has been a gradual improvement has been moved through the year. How much of that is pricing slightly getting better with rate inflation versus just the mixing around?

Thank you.

Yeah, on Germany, we don't expect an improvement in these, so automotive, it is a sector that that works with, you know, it's quite a planned sector, and they don't expect any improvement as far as we can see as always for this year, that's also why in Germany we take out cost accordingly, the rest of the market is quite stable but the 18 months rule has a bit of an effect on in terms being higher and quicker. So not a lot of deceleration, but not - definitely not an improvement for the rest of the year, so there's Germany for you, Italy, there's no effect yet on the demand purely because of legislation.

There must be, of course, more of an uncertainty in Italy and that's always very tough to call. We still see 7% growth from the 25% percent we saw last year, so all-in-all still a pretty good picture for us in Italy.

I'll just chip-in on margins in Italy, it's pretty stable gross margin, so I guess prudent to the Italian team with a very disciplined on price management but then also turning that into EBITA with good OpEx control.

Yeah. So, on gross margin in general it's partly ourselves, as we said, we do see - we do say goodbye to some clients and sort of fact that Henry said that gross margin in France is stable, it's also as proactively changing the mix which comes at cost of terms of top line growth, but we do feel it's our role as a leader in this world not in France with a number fee, but still leading the way here on sensible pricing, we think that's important for the long-term as sanity of the sector.

In general, certainly in the U.S. but also in countries like the Netherlands and Japan, there is some pricing power if you might call it like that because of the scarcity.

And again we're very disciplined on pricing. In the Netherlands we support this with data, so there is a pricing to that our consultants discuss with clients were based on the profile and based on the relative scarcity in a market a price comes out and that shows some good results for us in our Dutch business.

Thank you very much.

Yeah, good morning. Just one question, marginally at the sequential decline you're flacking to the fourth quarter, presumably that's all to do with the CICE transition and is there a risk but that could continue, obey, drag into next year, and manpower were pretty specific in the CICE impact, so as I see it now running through next year, you're still sort of not commenting.

I don't know whether you can - but you can comment on that. And then secondly in terms of the OpEx control we saw in the third quarter, how much of that is due to your sort of structural most of CICE cost reductions and how much sort of was due to sort of nearer tem, sort of short term measures, and can that be repeated if growth slows momentarily from here?

Thank you.

Thanks, Paul, for your question. Good morning.

So clearly on, as far as the gross margin is concerned, we - this point in time just the visibility that CICE in December will not come and we are - we don't guide on CICE, going forward we need to wait - the news in quarter four and as soon as we have something to talk about and we will. So as far as the OpEx concerns, there is clearly measures we are taking now in the short term, you've seen that in quarter three, we will do the same in quarter four.

But then also going forward, we will have very, very close eye on operational expenditures. We clearly factoring in a slightly lower growth for the next quarter and that will show up in OpEx as well

Yeah and Paul there's nothing new here how we've done it before and entirely different scenarios, so our cost is very, very little, we have variable pay, we have 25% turnover rates and all that. So we always look, as Henry said in his presentation, we always look closely at our cost every week, but of course in these times of relative uncertainty were even close from the ball, so we're confident that if necessary we'll take the appropriate measures, but we don't want to kill –we don't want to kill post, we don't want to kill growth because there's still a lot of growth in our business.

Great, thank you.

Good morning, gentleman. Couple of questions for me, one sort France and the CICE, we picked up a couple of stories that some of the smaller guys are being a little bit less aggressive on pricing certainly in the SME market now they don't have the CICE to lift their profitability.

Did you hear anything like that, is that helping your SME business, the Randstad business? And then a sort of another question about this sort of, more dynamic pricing in the Netherlands, how quickly can that be rolled out to the rest of the business?

Okay. Yeah the later one is a great question.

It's depending a bit on the whole back office and also availability of labor market information in the market. I definitely - we definitely have the plan to have a tool like this in our major markets within probably a year from now.

It is something that is picked up by our digital factory has well, we call a proven model, so will definitely take it as quickly as we can to other markets because we do feel it's very beneficial in the conversation that consultants has with the client. CICE SME, I've not picked up on those rumors and by the way it doesn't help us either.

We've been focusing on SME for a long time in France. We want to proactively change the weight of large clients towards SME in our French business.

We've consistently done that and also the technological support, so the data driven sales that I explained earlier helps in the SME sales. So we're happy with our performance, still see growth there, we don't think it has anything to do with what you mentioned.

Okay. Good anyway and just a final question.

We've seen a number of reasonably high profile RPO and MHP contracts either are dramatically reduced in scale. We study why their gross profit bans or indeed just completely ditched in the UK and in the States.

Have you had any situations where clients have just said, look the civil rights aren't good enough, we want to do something different?

No, of course we never have that Matthew. Of course you - although these contracts similar to our Inhouse are quite sticky, so we don't lose a lot of them and we win way more than we lose, let me put it that way and that's really more than 80-20 situation, so our growth is very much on keeping what we have and learning new customers.

Having said that, the UK is a business, but of course Europe for us, main land Europe is historically much more important and also in US and in Asia Pac we're doing quite well with our foresight business, but it's absolutely hard work. Also with our clients to educate them on what the labor market is all about and again the data we're having does help to educate our clients and also give them when they're international or global picture where labor markets are growing, so yeah, it is a labor intensive, but we're very happy with our foresight performance overall.

And the fill rates are holding up okay or are they sort of giving away a bit given the gap?

No, not really. What you do see is that in markets like the US and in certain profiles in Europe is that people are hired quicker, so therefore it's tough to keep your volume up so to say, but fill rates by and large are holding up well, provided that the clients also wants to play ball on talking about training, talking about different profiles and that sort of thing.

Okay. Thanks a lot for your help.

Okay.

Yeah, morning everybody, just on the Perm revenue growth, the gaps between Perm and the rest of the business is obviously quite wide at the moment and then looking to each major region, it's well ahead of the temp growth and your EBIT margins are flat to down in most major regions. So could you maybe just talk about the profit in terms of your Perm growth and what level of costs you're putting in there and whether you expect that Perm growth to persist?

And then just amongst - the revenue growth is obviously around about the same, but slightly less down year-on-year. I wonder in amongst the line, you do book with other types of the Randstad group will buy services from Monster.

So I just wondered can you make a comment. Are the external sales seeing a slightly slower rate of decline or are they declining at the same rate please.

Yeah, I'll say the spend of Randstad within Monster is fairly limited, so that doesn't play a role, a significant role in the Monster top line so to say. As I mentioned in my presentation the traditional part of Monster, so let's the job postings that's hard work to keep that up and again you will see renewals all the time, so very tough to who you predict this one.

And as we of course don't provide visibility for our businesses, we don't for monster. It's absolutely the same in terms of visibility.

Perm, yeah, so it adds 20 basis points to our gross margin, so we're very happy there. What we see and I would say that's regardless of the economic situation, but our big incumbent businesses are staffing businesses such as our French business, our Belgium business, our Italian business, our German business are gaining a lot of momentum with what we call Permian staffing and we've not seen the end of that, so this will help our result going forward.

Okay and sorry, I've got one follow up on Germany. It looks like your corporate staff are up about 15% year-on-year, so what are the - what's the scale of the actions that you're intending to take in Germany?

Can you relate to the left of the facts that you think you need to save that please?

We are taking out - of course as we speak, we're still in discussion internally with our workers councils, so we're not giving any concrete guidance here, but of course it's enough to safeguard our EBITA as a percentage. We are investing mostly in our Professional businesses, beefing up Perm there and also in mobile which we call group direct as you know our Professional business is called group based on the company we acquired with video a long time ago.

And what we're doing here is, we are allow our clients to search I 90,000 freelance IT database directly that comes with a marketing investment - it's sort of a mini monster but then homemade. And it comes –but we do see improvement now as in some 40 placements per month now.

So that's an investment to deliver the investment in the future, but again taking out cost in Germany, we'll update you fully after the Q1 presentation.

Okay, many thanks indeed.

Yeah, thank you for taking my questions. The first question is on the OpEx line you're for in the broadly stable development quarter-on-quarter, but given that you are putting the brakes in Germany, the fact maybe accruals might be lower or a bit of release of accruals, should we expected actually the cost base quarter-over-quarter to come down actually?

Yeah, so when we guidance sequentially stable than we got for something we're very, very confident on and also we're working hard to maybe beating that, but at this point in time we definitely see that they're very stable.

Yeah and German factor marker you will see most of that into Q1, so we will see people leaving somewhere in November, so the actual cost effects in Germany will be fairly limited for the quarter. I think our German management was very short on the book.

We always have scenarios as we might have talked to you about what if, so be very quick on it, but we wanted to see what happened after the summer to act. We concluded that we needed to act more on a different scenario, which was probably three, four weeks ago then you need to be in discussion with your workers Council because we're talking about people here of course and we take out these people and the full effect will be visible in Q1.

So we'll have a good start in terms of course in our German business, we think reflective of what we're currently seeing as a revenue development.

And may be looking to your personal development, the minus 3% in Q3 is quite a significant number already, what is driving that? Is that for a big parts still restructurings and integration say things or is this specifically certain countries and is that already a full tread number or is it just something from the last couple of weeks?

Can you maybe give a bit of fuel there? And for the 50 remaining stable, so maybe also comment there how you see the development going forward?

Yeah, a significant part of course is still in Monster had and we guided for that and we do need - we now see - we still see markets which are growing but in many markets we also - we still feel that we can - certainly in Asia for example, we still grow without adding people. So yeah, there is always some upside in productivity of course, but yeah, at low growth that's quite tough to achieve at the same time.

But overall the cost goes up less than the GP, so that's good at stable margin, so more than 50% ICR for the quarter and as Henry already stated, so yeah, working hard to keep that up.

And then maybe on the cash flow and your leverage ratio, Henry can you take us through the moving parts? You already highlighted 100 million CICE you're currently 20% up.

I think you mentioned in the call on the cash flow with the market coming down a bit and maybe some work working capital releases, should we see perhaps the normal 500 million cash inflow in Q4 or is that too wild given that just below 400 last year?

No, it's probably a little too much on the wild side, but it's not too far off. Yeah, I mean, it's pretty easy to make the calculation on the EBITA.

Indeed we see the release in working capital; CICE is coming in with about 99 million in there. So it will be very, very strong cash flow quarter and for the fall, so I'm not in position to give you the account on the expect number on that.

And all cash that is - that brings the leverage ratio back to one that will be paid out as a special divi?

Absolutely, we're confirming our new capital allocation policy. We expect to exceed the leverage ratio coming below one and then indeed we will return cash to shareholders.

And how we return, we will have a close look, but when have that will be special dividend or share buyback.

Great, okay. Thank you very much.

Hi, good morning. I got a couple of questions, first in your opinion over longer term, do you think the form of CICE change could actually lead to contract renegotiations with clients because I think you charge a multiplier of wages to client and once the form changes it will lead to a lower employment of - lower cost of employment.

So will the kind - clients kind of continue to pay the same multiplier? And then the second, in the presentation you mentioned that the workforce scheduling tool you kind of give free of charge to your clients, then can you shed some light how do you actually generate return from these investments?

Thank you.

Yeah, absolutely, so CICE is part of life, so subsidies a part of life. So CICE is one of four subsidies which are in the total cost price, so the discussion with large clients is not so much literally on the multiplier, but absolutely on what are the constituting elements in the cost price.

So yeah, absolutely when there's a new system it will lead to negotiations, but our management is very experienced there. We are very disciplined, so we're quite optimistic that any change will not lead to a significantly lower result, but yeah, we need to go back and explain to clients the change that's true and workforce scheduling, good question, so we give the tool free of charge.

If it's in our Inhouse business that means that our consultants become more productive because the temps are planning themselves that gives our country consultants more time to do stuff which really matters, so walking around the floor, talking to clients, talking about the size of the pool, but maybe also picking up other businesses, other profiles, Perm orders that sort of thing is to bigger clients where we have four or five consultants, we can probably do with less and therefore improve our productivity. So in our US business where we now have 77 Inhouse clients implemented with these tool, we do see all elements of pool management that we see improvement, so we see better fill rates, lower churn in the pool and that's all good news for clients.

So and normally then on the financing, we take market share and we improve our productivity. In the situation where we give this service to new prospects of course it's quite clear we get revenue and we get market share who are already small there, so that's real new growth which comes in at addition return and the investments for us are not great, so we make these apps in Portugal for Europe and in Malaysia for Asia.

So that's relatively low cost for us and the tool that we give free of charge is actually companies that we've invested in, in our innovation fund. As we said already quite a few times on digital, it's not the absolute cost, is very much the sales and the different way of working that gives you more growth or higher leverage on the business you're having, so that's our strategy here.

Yeah, that's great. Can I just ask one more, sorry.

You said you expect 90 million to 100 million of cost saving next year, how much has been achieved till date?

We've - certainly we'll be confirming that. The big part of that is still months [ph] and we're well underway to achieving that.

We do not give binocular some of very, very detailed view of where we are year-to-date.

And the second part is what we call Global IT systems where we bring our 450 databases to the cloud, which apart from cost gives us a lot of benefits in terms of database security and all that and also makes the cost here variable for us which is also good, but most of those savings will come through next year and the second part of this 90 million to 100 million.

Thank you so much, that's clear.

Okay.

Yes, good morning gentlemen. Yeah, some of my questions were already been asked, but looking at US, could you get some indication of what you see with respect to volume and wage inflation impact on your sales trends and do you see that for any further increase in wage inflation driving your gross [ph]?

Then going France, in the previous quarter you indicated you would adjust your cost base somewhat, could you give some feeling what really have happened and as already been any impact to Q3 or you've not, but when do you expect those savings to filter through? And lastly on Monster, yeah, could you get some feeling, is it now a break even or slightly profit contribution and looking at the current trends - yeah, if the current trend continues, when do you expect that again to have additional measures to reduce cost?

Yeah, US wage inflation it is happening in blue collar around to 2%, 3%, so we don't make exact calculations here, but let's say of the 5% growth in staffing it might be 1% wage inflation or slightly less, so it is the absolute massive. On France, yeah, well, this is a country where it's tough to take out cost massively, so France will be very organically - we're not going to any drastic measures such as a social plan and all that and so as opposed to Germany the take out of course in France will be slower than in any other market, but that's a deliberate choice we're making not to destabilize the business because as I mentioned half of our branches are still growing show it's a very mixed picture with very targeted negative growth and shouldn't [indiscernible] our business.

On monster, so Q3 is around breakeven, but what I said last time it's not an absolute goal for us on the short term to breakeven or have a small profit. The goal is very much to replace monster or revamp Monster from a traditional board to a very dynamic platform where clients can find their candidates and we help them do so and they also can improve their employer brand.

If you stop - it's very much a marketing play, if you stop investing in marketing then your traffic goes down, so we're not going to do that. And that's why we say it's under control which is very much for us.

The - how do you call it - the balancing act of investing in the future and taking out cost - cost reach is not necessary.

Okay, can you get maybe some feeling on Monster, what you see as to as part of still the traditional business and what you see let's say the new business.

No, not really because then I'm putting the whole business out in the open and there's also competition in many markets.

Okay, clear. Thanks.

Hi, good morning everybody. I've just one question on the operational leverage of the business.

You stated in your presentation that you confirm the margin guidance for the full year, but just in general if you are going to achieve any improvement of the underlying EBITA margin up from the 4.6% last year, you stated before you needed some 4% to 5% organic revenue growth. Is that the fact that you confirm your margin outlook, does that state implicitly that you still look for 4% to 5% organic revenue growth for the full year 2018?

Yeah, I think [indiscernible]. So indeed we set a base of 4% to 5% growth, we will - so I accept to 4.3%, still to 5% to 6%.

Even if it's not to know, we are confirming that we will be able to deliver that. So when you just make the calculation, we said that the first few weeks in quarter four, you see both the thing grow and as in quarter three will probably be much below that.

So still our guidance is pretty much in place.

Right, so just to confirm even if your organic growth rate for the full year comes in at say somewhere between 3.5% and 4%, do you still think that your adjusted EBITA margin will be higher than the 4.6 you reported last year?

That's correct. That's what we're working on, yeah.

Thank you very much.

Good morning, chaps. Three please, starting off with the Q4 guidance.

It looks like you're expected - I mean look at your gross margin and SG&A guidance, it looks like you expect your EBITA margin to be broadly flat year-over-year. Yet you suggest CICE dropping out will have about a 20 basis - in December having a 20 basis points headwind in the fourth quarter.

I'd just be interested to know what was driving sort of twenty basis points operating leverage. Is it Monster or is it Perm, just if you could elaborate on that please.

Secondly, similar subject CISE, 2019, as I'm aware the budget is more or less concerned now, we know CICE is converting to a payroll subsidy from January, we know the additional CION subsidies kicking until October, so what is it exactly you're waiting on before giving us guidance, please. I would have thought you have enough in for now.

And finally sort of aligned with the previous question, I think it was around this time last year when you gave guidance for some progression in the EBITA margin in 2018, just wondered how you are thinking about 2019 and what sort of growth rate you would require to generate some progression, a broad range is fine? Thanks.

So let me take the first and the last one. So on Q4, we just spoke about that, so we have very, very close eye on operational expenditure in quarter four, you're right.

CICE, in December, we spoke about - for the rest of it we see actually underlying gross margin being pretty stable. And if we take those two together we see overall for the full year provided that top line is relatively stable leverage for the year.

For 2019 I'm afraid we're not in position to give you any guidance at this point in time. That leaves Jack talk about CICE.

Yeah, maybe a bit on Q4, of course we can talk about France there as a sort of benchmark for Q4, but we have many count - many businesses that show good growth and that they of course deliver improvements in results and that carries our group results in our US business Asia-Pac business, so there's a lot of businesses that are doing still fairly well, our Italian business, so it's a mixed picture and that also drives our result fortunately. Yeah, on CICE - so apparently you know a lot, which is good, we don't.

So the moment we have a formal right up of the system, the French government tends to not have a very straightforward systems. So the devil is in the details here and the moment we know, but then knowing it's really in writing, in the details, the start date, how does it work, then we'll share with you, but we don't have it, so if you have it please send us a copy we're well prepared.

Okay, but what if - but what essentially that gives without knowing the detail, you can't sort of guide based on the conversion of CICE on the 1st of January and the deferral of - or even the exclusion of any additional federal tax cuts as he previously guided from October. That alone is not enough to give a range?

No, because if you would now ask my collogue Francois [ph], he would not - he would not be able to give me an answer, so that's very honest answer. We really don't know at this moment.

So in fact probably it will come in, in a few weeks, but what I've seen with the systems are looking at this market for a long time you first need actually a lot of time yourself to really look into the details. The only thing I can say is how do we do with these things, you know the drill, we're probably the ones that give the least away.

Fair enough. Thanks guys.

Okay.

Good morning, I'm sorry, mute was on. Just a couple from me, on the CICE bet it looks like everyone on the sell side have a calculation, which they're able to do and come up with a number.

You and some of your competitors are not very keen to give out a number, what is it that we might be getting wrong? I mean, that's clearly - something you think is very uncertain and the sell side teams state the answer is very certain.

So the gap between our understanding and yours, can you help us understand what that gap might be. The second one is, you referred to US wage inflation in blue collar, you said 2% to 3% that's quite helpful.

Looking at the temp wage inflation data, that's 3.5% to 4.5%, private employment payroll is up 3% to 4% - 3% to 5% in August and September. Is it a difference of your exposure which is causing lower wage inflation or is it I guess two much number hence we should basically - because you don't compute it, we should rely on BLS and another sources for that.

Let me take the first one on CICE. Obviously we do want to spend - you're keen as to get more clarity on CICE and we're completely with you on that one.

So we don't think it's good if we start speculating on it. So let me really - let us wait until we see really all the detail and then we'll translate that into what we think about it.

We could call that it would not be good to speculate. Please understand that.

Sure on the wage inflation, so in general it's always overestimated as the effect it has for us, which is mostly about the fact that with us it's always a bit watered down, so wage inflation is the same amount of people staying in a job and then increasing their wage, but of course we always put new people in there and sometimes or many times they sort of come in. At the lower wage scale or at the new wage scale, so it's always watered down.

So if it is - if it's on average for them with us it will be one to two or something.

On which inflation rate out what I can tell you if the people who are changing jobs they have a harder of it inflation number, so that does not basically add up in my head.

Yeah, that's a pity, but we - that is the individual people getting individual jobs. What we a lot in our staffing business there are predefined schemes which don't necessarily mean that people go up automatically.

So dependent from where they're coming from, sometimes they come from no job, sometimes they come from a sector that pays lower, so for us it's not as clear cut as just running the numbers.

Okay, so it's basically what you're saying is, in the mix you're operating in with - basically the bulk contracts you have in place, you're unable to benefit from that broader wage inflation data which is coming across from people who're changing jobs.

Yeah, that is sort of what I'm saying, but not really. So first of all it's all about bulk contracts.

So we have a very fragmented labor force. For example, logistics in our sector grows faster than life sciences or car manufacturing, then we have a different mix, so it's not like we have the same amount of people in the same job.

So in a year in a sector like ours there's a lot of changes, so what I'm saying is, it's not as straight forward that you should translate wage inflation into growth for our business. That's the only thing I'm saying, it's just too complicated for that.

Okay, so you've done some backed out calculation which tells you your wage inflation is lower based on your mix.

Yeah, you're sort of - how do you call that, rephrasing my answers in a way that I don't recognize, so let me do it finally. Wage inflation should not be translated directly into growth numbers in our industry because it doesn't work that way because we don't have a stable workforce.

Okay, but do you have a hard number backing it?

No, I don't have a hard number, I have got a guess which is probably, in our staffing business around 1% of the 5% growth and the rest is more people at work predominantly in our Inhouse business which is doing very well.

Understood, that's very clear. Thank you.

Okay.

So thank you. Let me thank you all for your questions and very much looking forward to seeing most of you at the breakfast tomorrow.

Thank you so much.