william blair & company 34th annual growth stock conference · accounting staffing demand u.s....

1 © 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V. © 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V.

William Blair & Company 34th Annual Growth Stock Conference June 10-12, 2014

Max Messmer, Chairman and CEO Keith Waddell, Vice Chairman, President and CFO

2 © 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V.

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


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 (2013)

FORTUNE® WORLD’S MOST

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


Global Operations

Asia-Pacific Australia China India Japan New Zealand Singapore

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

© 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V. 4


76%

24%

Robert Half Revenue Mix* – By Geography

United States International

*Q1 2014


3%

4%

5%

12%

24%

Robert Half Revenue Mix* – International

Percentage of Global Staffing Revenues

Continental Europe

Canada

Asia-Pacific

U.K. International

*Q1 2014


1%

3%

4%

4%

Other

Robert Half Revenue Mix* – Continental Europe

Percentage of Global Staffing Revenues

Germany

Belgium

France

Continental Europe

12%

*Q1 2014


Robert Half Revenue Mix* – Business Segments

79%

12%

9%

Permanent Placement

Risk Consulting and Internal Audit

Temporary and Consulting

*Q1 2014


Our Brands

Specialized Staffing

Project Skills

Project Management

and Deliverables

Recruiting


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


JOB GROWTH RACE

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

Financial Analysts

Accountants

Auditors

© 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V. 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 same number or more the following year

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

Public Accounting Recruits


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, Q1 2014)

– Web developers: 0.7%

– Computer network architects: 0.8%

– Computer systems analysts: 0.8%

Application development demand migrating to middle-market companies

Growing need for customized software, websites, mobile, social media


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


Marketing Approach

Positioned as quality leader through advertising and PR activities – Thought leadership: published content, salary research, other resources

National, local 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


Alliances at a Glance

Exclusive Career Partnership

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


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%


Return on Equity (Q1 2014 & 20-Year Average)

*Through Dec. 31, 2013

26.9%

24.9%

Q1 2014 20-Year Average*


Post-Recession Operating Performance

Following each of the prior 10 recessions in our company’s 66-year history, Robert Half emerged stronger than ever

16 most recent consecutive quarters of double-digit growth in net income and earnings per share on a year-over-year basis

RECOVRY


Recovery Comparisons

Number of Months

U.S. Unemployment Rates

Most Recent Cycle

Prior Cycle

Source: BLS and Deutsche Bank


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

Prior U.S. Recovery vs. Current Recovery

Source: BLS and Deutsche Bank


3.9%

10.4%

Aug 2003 - Sept 2007 Dec 2009 - Mar 2014



U.S. Staffing Revenues (thousands)

Unemployment Rate

Q1 2014 $719,702 6.7%

Q4 2006 $710,011 4.4%


Temporary and Consulting Revenues ($ in Billions)

(2001‒Q1 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

$0.8 $0.9

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Temporary and Consulting Gross Margin % (2001‒Q1 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% 36.1%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Temporary and Consulting SG&A % (2001‒Q1 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% 27.2% 27.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Temporary and Consulting Operating Income % (2001‒Q1 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% 8.9% 9.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Permanent Placement Revenues ($ in Millions)

(2001‒Q1 2014)

$189

$100 $95

$136

$219

$336

$444$427

$182

$221

$302

$334$348

$83 $93

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Permanent Placement SG&A % (2001‒Q1 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% 84.9%81.3%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Permanent Placement Operating Income % (2001‒Q1 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% 15.1%

18.7%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014

2009

2002 2009


Protiviti Revenues ($ in Millions)

(2004‒Q1 2014)

$352

$479

$543 $552 $547

$384 $386

$424$453

$528

$117$134

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Protiviti Gross Margin % (2004‒Q1 2014)

37.8% 39.8%36.6%

31.6%28.3%

20.8%

25.2% 26.8% 25.9%29.3%

25.7%27.4%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Protiviti SG&A % (2004‒Q1 2014)

19.9%21.6%

25.5%27.8% 26.9%

28.9% 28.1%25.6%

23.5%21.2% 22.5% 21.9%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos.2013

3 mos.2014


Protiviti Operating Income % (2004‒Q1 2014)

17.9% 18.1%

11.2%

3.8%1.3%

-8.0% -2.8%

1.2%2.4%

8.1%3.2%

5.5%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 mos. 2013

3 mos. 2014

2009

2009

2010


Strong Financial Position

As of 3/31/14

Cash $268 million

Total assets $1.5 billion

Virtually no debt


*Through Dec. 31, 2013 **Cash flow from operations net of cash used for investing activities

Cash Returned to Shareholders ($ 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%


Robert Half Quarterly Dividend History Since Inception

$0.06

$0.07

$0.08

$0.10

$0.11

$0.12

$0.13

$0.14

$0.15

$0.16

$0.18

$0.05

$0.06

$0.07

$0.08

$0.09

$0.10

$0.11

$0.12

$0.13

$0.14

$0.15

$0.16

$0.17

$0.18

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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%


Market Opportunity — Staffing Services

Annual global revenues for staffing industry approximately $400B USD

Highest number of U.S. job openings in professional/business services (BLS JOLTS report, May 2014)

Employment services among the 20 U.S. industries expected to add the most jobs through 2022 (BLS)

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

Recent recession has increased 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

41 © 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V. © 2014 Robert Half International Inc. An Equal Opportunity Employer M/F/D/V.

Thank You

william blair & company 34th annual growth stock conference · accounting staffing demand u.s....

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