2014 annual report - jaarverslag · 2014 annual report _ usg people n.v. 7 2014 was a year of...

2014ANNUAL REPORT—

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.

2014 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 14Star brands 16Stakeholders 17Business principles 21Mission, vision and strategy 22Ten-year overview 26Financial calendar 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 44Report of the Supervisory Board 46Principle features of the remuneration report 50

EXECUTIVE REPORT— 56

Developments in our social relevance 57Developments in our market 60Development of financial results 62Developments for our clients 68Developments for our flex workers 69Developments for our employees 70Developments for our capital providers 72Strategy execution summary 75Risk management 77Sr policy: results and ambitions 79Outlook 82

FINANCIAL STATEMENTS— 84

Consolidated financial statements 86

Consolidated income statement 86Consolidated statement of comprehensive income 86Consolidated balance sheet as at 31 December 87Consolidated statement of changes in equity 88Consolidated statement of cash flows 90Notes to the consolidated financial statements 91

Company financial statements 139

Company income statement 139Company balance sheet as at 31 December (before profitappropriation) 139Notes to the company income statement and balance sheet 140

Other data 145

Events after the balance sheet date 145Provisions in the articles of association regarding profitappropriation 145Profit appropriation 146Independent auditor's report 147

Financial glossary 153

CONTENTS—

32014 Annual report _ USG People N.V.

OVERVIEWAND STRATEGY—

4 2014 Annual report _ USG People N.V.

2002

1972

1997

2001

2005

2008

2014 2013

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.

FOCUS—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.

UNITED—USG People completes its brand unification into the star brands Start People, Unique, Secretary Plus and USG Professionals and further expands its range of business solutions.

overview and strategy

HISTORY—


EMPLOYEE SATISFACTION—

7.0EMPLOYEE ENGAGEMENT—

7.3

Revenue á 4.5% € 2,355 million

Expense ratio (% of revenue)17.9% ≥ 16.6%Proposed dividend

€ 0.16 (+14%)

EBITA á 30.4%�€ 86.7 million

ONLINE BUSINESS SOLUTIONS—

PUBLIC DEBATE—Leading contribution to public debate on the development of the job market: Job market debates, 26 June: ‘The employee of the future – about the changing needs and wishes of employers an employees’, 19 November ‘The future of work and labour’.

BUSINESS SOLUTIONS—Solvus concept implemented. Services with high added value: recruitment process outsourcing (RPO), career transition and performance & development.

UNITED—Activities unified in four star brands.

Leverage ratio2.3 ≥ 1.7

CLIENT RELATIONSHIPS—Closer ties with our clients. Growth of in-house branches and more long-term relationships with clients.

40% of senior management

is female

50% of middle management

is female

BRONZE FIRA CERTIFICATE—


HIGHLIGHTS—


in thousands of euros unless otherwise stated 2014 2013

Revenue 2,355,032 2,270,031EBITA 73,544 26,856Operating income 67,173 41,300Operating cash flow 71,079 26,186Net income 25,855 -26,058Dividend 12,953 11,268Equity attributable to equity holders of the company 477,104 458,335Investments in property, plant and equipment 6,498 3,775Investments in intangible assets 12,105 14,117Market capitalisation at year-end 755,575 779,887Total number of shared issued at year-end 80,957,360 80,483,677

Average number of employees (FTE)- indirect personnel 4,821 5,057- direct personnel 58,031 54,705

Number of branches 763 797

RATIOS EXPRESSED AS PERCENTAGESEBITA / revenue 3.1% 1.2%Operating income / revenue 2.9% 1.8%Net income / revenue 1.1% -1.1%Equity / total assets 39.1% 38.5%

PER SHARE IN EUROs(based on average number of shares outstanding)Net income 0.32 -0.33Operating cash flow 0.88 0.33Dividend 0.16 0.14Shareholders' equity 1) 5.89 5.69Share price at year-end 9.33 9.69Highest share price 14.10 10.35Lowest share price 7.47 5.00

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


KEY FIGURES—


2014 was a year of growth in numerous areas: in the development of theservices we provide and the partnerships with our clients, in the numberof people we find jobs for every day through our star brands, in being agood employer, in market share, in continuity and in our financial results.It is therefore with pride that I am able to say that our focus strategy isworking.

During the years of the economic crisis we took thorough steps to optimiseour organisation. Over the past years USG People has been repositioned

and has become more agile and responsive. In 2014 we made good andsuccessful use of this. The straightforward organisation and managementstructure with short lines gives our people a lot of responsibility andensures a high level of motivation and dedication. This enables them toapply their knowledge and expertise with great enthusiasm and passion toachieve our shared organisational objectives. At the end of the day ourdevelopment and progress are largely dependent on the efforts made byour people.


CEO'S PREFACE—


The high level of motivation and good chemistry in our organisation werealso confirmed by the positive trend in the findings of the 'Great Place toWork' survey, with the 2014 edition showing a further improvement in thescores on all aspects across the organisation. We see this as a clearindication that we are on the right track to enable our people to realise ourcorporate targets as well as their own personal development.

The creation of the star brands, each with its own clearly distinctivemarket position, is having a positive effect on the organisation. Combiningthe various brands, which took place in 2013 and 2014, has resulted in amore effective operation. This pooling was more or less completed in2014.

This means we can focus all our energy on our clients and use ourexpertise and our new infrastructure to generate as much added valuewith our services as we can. In 2014 this resulted in closer ties with ourclients, evidenced for example by growth in the number of in-housebranches and a more stable client base. This is consistent with our aim toestablish partnerships so that we can work together to create synergies inour clients’ personnel organisation.

As a result of all these factors we gained market share in 2014. Ourmarkets showed a gradual recovery in the course of the year, with demandin the Netherlands and Belgium in particular increasing in 2014. Therecovery started at the large corporates in 2013 with demand from smalland medium-sized businesses (SME) – traditionally an important marketsegment for us – also starting to pick up again from the second half of2014. There are a large number of jobs in this segment, where we have avery extensive network with enough capacity to facilitate an increase indemand. Developments in our markets in France and Germany remaineddifficult and were on balance negative in 2014.

European countries saw their economies recover in 2014 and currentexpectations are for a gradual continuation of this trend. Economic growthhas a decisive bearing on the number of jobs and is therefore crucial to oursector. The aforementioned recovery led to a slight improvement in theemployment market in 2014. The long-awaited recovery in the hiring ofstaff by the SME segment in the course of the year was a very positivesign. While the recovery was still modest these are positive signs whichare also important to us as external factors; economic growth in generaland an increase in the number of jobs in the SME segment in particularhave a material impact on our growth.

In 2014 our group achieved revenue growth of 4.5%. At the same time wesucceeded in further reducing our costs, leading to a sharply improvedresult. EBITA rose to € 86.7 million from € 66.5 million in 2013, an increaseof 30%. We also further lowered our net debt. As a result of the reductionin debt and the increased result the strategic target for the net debt, set in

2011, was achieved in the third quarter of 2014. Given that we aim toreduce our level of debt even further in 2014 we have tightened our targetfrom two times to one time EBITDA. At end-2014 this ratio stood at 1.7.

The improvement in our debt position gives us room to increase thedividend distributed to our shareholders. We have therefore decided thatfrom 2014 our dividend proposals will be based on cash-only distributions.In previous years we have always offered shareholders the choice ofreceiving the dividend in cash or in shares. Furthermore once the targetleverage ratio of 1 has been reached the dividend distribution rate will beraised from one-third to 40% of net income before amortisation ofacquisition-related intangible assets.

With an eye to the future we also continued to boost the innovativestrength of our organisation in 2014, for example by taking stakes inupcoming online service providers. The interests we have acquired formthe basis for a new stage in our development. The business platforms areused by our star brands, which offer the online services within theirnetworks. In this way these new activities support the digitaltransformation of our existing organisation, as well as growingindependently.

Furthermore we see that socially responsible business practices areincreasingly integrated in the services we provide. In addition to creatingfinancial value we explicitly also look to create social value through ourservices. For example we are increasingly helping to provide solutions forour clients’ inclusivity issues and the long-term employability of staff. Theaward of the FIRA certificate in 2014 is recognition of the efforts made byour four star brands in the area of social involvement in the four corecountries where we are active.

The above shows that progress has been made in many areas that we cancontinue to build on in 2015. I extend a warm thank-you to our colleaguesfor their efforts and the contribution they made to the growth we achievedin the past year. The commitment and dedication of our staff gives meevery confidence in a bright and successful future for USG People.

Rob Zandbergen, Chief Executive Officer

25 February 2015



This annual report provides an account of the development of ouractivities in 2014. 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. This year we are once again publishing an integrated annualreport in which we not only provide legally mandatory information but alsoreport on the development of the interests of our company’s stakeholders,including our contribution to the society in which we live and theenvironment. Socially responsible business practices are an integral partof this year’s annual report. In previous years we published a separate SRreport.

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.

materiality index

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

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IMPACT ON USG PEOPLE

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ABOUT THIS REPORT—


As the connecting link on the job market, USG People plays an importantrole in matching employers and employees. Bringing together supply anddemand – the selection – was traditionally our main added value forcandidates, companies and therefore also for society. Matching was atthe core of the services we provide. These days we still fulfil this role butour role is changing, becoming broader. Our greatest challenge now isdeveloping solutions to make better use of employment potential and tomaximise the development of all possible talent. Connecting people witheach other, their talents, driving force, networks and companies. This isour objective when creating links between employers and employees,young and old, productivity and satisfaction, black and white, people withlimited opportunities and elite athletes, vitality and results.

As a result we are able to contribute to healthy job market dynamics, thusimproving the way society and the economy function. A job market thatoperates well ensures that more people take part in it. It leads to higherand more widespread participation.

The professional coaching and support we offer helps to develop talent,strengthen the innovative capacity of employees and develop andinnovate the way employers organise their staff. This also helps reducefriction in the job market and provide better opportunities for youths, olderpeople and more vulnerable people to enter the job market. Our effortshelp improve employee wellbeing, a circular job market and prosperity forsociety as a whole.

In this day and age being able to have and maintain a sustainable businessmodel means needing to look further than just connecting supply anddemand for employment. It is becoming more and more important to betransparent about our added value towards our clients, candidates andemployees. By this we are referring to the financial and social value wecreate through our services.

GREATER CHANCES FOR SUCCESS FOR ORGANISATIONSWe provide companies – both large and small – with professional supportto help deal with numerous HR and job market-related issues they mayface. This ensures that companies are able to utilise their staff, knowledgeand capacity more flexibly, thus reducing their risks. We help companiesstrengthen their innovative power when it comes to organising staff anddeveloping and identifying talent. In doing so USG People acts as a‘lubricant’ in a job market that does not always operate smoothly, andhelps improve the prosperity of companies and society as a whole.

USG People has a large and exceptional network of diverse talents who arelooking for a suitable job or new challenge. Employers can use thisnetwork as required to organise their staffing levels effectively,sustainably and in a diverse manner. This enables organisations to betteralign the composition of their staff to actual demand.

Using the right solution helps companies organise their own staff and flexworkers as required. This improves their operational versatility which, inturn, makes it easier for them to respond to opportunities in their market.At the same time it reduces the risks associated with an inflexible staffingorganisation and ineffective employment relationships. The availability ofqualified people at the right moment for the right job strengthenscompetitiveness and ultimately increases the chance of success forcompanies.

MORE PEOPLE IN JOBSUSG People offers jobseekers access to a large network of potentialemployers. We help people realise their ambitions and shape theircareers. USG People’s extensive network of employers and the growthpossibilities we have access to provide attractive opportunities for peopleto bring out the best in themselves. USG People uses its years ofexperience to help empower people and develop their talent. This providesthem with versatile and sustainable opportunities to find a satisfying joband successful career and to develop their social status.

We are actively trying to help everyone who can and wants to work find ajob. Young or old, highly-skilled or low-skilled, with or without a disability,from a variety of cultural backgrounds, male or female, close to or furtherremoved from the job market, from starters to professionals.

LONG-TERM EMPLOYABILITY, TALENT MAXIMISATIONTo provide as many people as possible with access to the job market butalso to help those in jobs stay competent and involved, we have to focuson long-term employability. Long-term employability means investing inhealthy, flexible, involved and competent employees who are able to

STRONG COMPETITIVENESS

BETTER CONNECTION BETWEEN LABOUR SUPPLY AND DEMAND

MORE PROSPERITY FOR PEOPLE AND ORGANISATIONS

BETTER FUNCTIONING ECONOMY

MORE SUPPLY AND DEMAND FOR WORK


SOCIAL RELEVANCE OF OUR WORK—


continue to contribute to society both within and outside the companythey work for. We make a point of doing this but also help our clients dealwith issues surrounding employability and inclusiveness. In doing soUSG People adds both financial and social value to employees, companiesand society as a whole.

INNOVATIONSVarious (often technology-driven) innovations help us improve theorganisation of labour in society, thus further increasing the employabilityand productivity of the working population. However, achieving a better-organised job market requires more than constant increases inproductivity. It is mainly about how best to contribute to the prosperityand wellbeing of everyone in society. This creates challenges, for examplein the field of training, employee involvement and healthiness of the jobmarket. These financial and human challenges serve as starting points toincrease our added value for society as a whole and for our organisation inparticular. In this way USG People contributes to both social and economicprosperity.



SUSTAINABILITY MISSION AND STRATEGYSustainability is increasingly becoming an integral part of our operations.It goes without saying that the ‘people’ component is the cornerstone. Oursustainability mission is aimed at being a leader in identifying, employingand developing talent. In other words, maximising human talent is ourcore business. As such, sustainability is embedded in our company’sstrategy. We want to play a prominent role in employing all available talentin a sustainable way. Looking at talent and the job market this way resultsin a circular, sustainable, reciprocal and inclusive job market. A job marketin which the value creation of all talent is maximised, and in which peoplegrow to be sustainably employable and to remain so in the long term.

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 andsustainable way. Our focus is on what we can do for society andbenefitting in 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 standard deals with are summarised in five USG Peoplespearheads: 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 impact we have on society, our employees and our otherstakeholders.

USG People defines ‘being a good employer’ in a broad way. We want to bean attractive and innovative employer for our own staff and flex workers.An employer that is accessible and one that empowers employees. Apartner focused on the long-term employability of all employees. Wepromote this by providing our own staff and flex workers with thefacilities, conditions and support they need to excel.

We define ‘sound business practice’ as the creation of value with asustainable balance for all stakeholders. Our employees must be able todevelop under good working conditions. Investors must be able to achievean attractive return on their investments. Our business partners must beable to count on us to provide added value through our services and wemust be able to operate in a responsible and sustainable way in societyand the environment in which we live.

USG People views ‘diversity’ as every aspect in which people differ fromone another. This is a broad definition because we believe that people

cannot 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. We aim to achievediversity in the composition of our workforce.

Social 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 dothis 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 in the workplace. Everyone has to beable to participate.

In addition to our obvious focus on people we also pay attention to theenvironment, i.e. the surroundings in which we live. Our branches useoffice space and we often travel by road. This causes CO2 emissions. Webelieve it is our responsibility to take measures to minimise theseemissions.


OUR SUSTAINABILITY POLICY—


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.

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 them

attractive 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,

EMPLOYMENT MARKET

MATCHING

SOLUTIONS

ACCESSIBILITYSTAKEHOLDERS

—

- Society- Our capital providers- Our business partners- Our employees

RESULT

—

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

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


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.

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.

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

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

COUNTRIES—The NetherlandsBelgiumFrance

SEgmENT—General staffing

SEgmENT—Professionals

SEgmENT—Specialist staffing

SEgmENT—Specialist staffing

COUNTRIES—The NetherlandsBelgiumFranceGermanyAustriaSwitzerland

COUNTRIES—The NetherlandsBelgiumGermany

COUNTRIES—The NetherlandsBelgiumFranceGermanyAustriaSwitzerland

EmPLOYEES—direct 73,249indirect 3,014

EmPLOYEES—direct 1,825indirect 298

EmPLOYEES—direct 24,326indirect 1,606

EmPLOYEES—direct 1,128indirect 151

REVENUE—1,407

REVENUE—148

REVENUE—731

REVENUE—62

WORKINg FOR EVERYONE—

UNITINg ExPERTISE. aCCELERaTINg ambITIONS.—

WORKINg ON TOmORROW—

ExPECT mORE—


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 growth of USG People. It is in this belief that weconstantly invest in being a good employer. Sustainable employability and,more specifically, the maximisation of talent play a key role in this.Sustainable employability has to do with the question of how ‘job marketfit’ someone is. We believe it is important to invest in flexible, involved,competent and healthy employees. Maximising talent has to do withsomeone’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 skills and competenciesneeded to perform their job and which fit into our corporate culture.USG People hires employees not only to fulfil a certain position but alsowith a view to a career with the company.

The use of qualified, motivated and trained employees is crucial forensuring the sustainable growth and further development of society,USG People and 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. It is important that employees areaware that they themselves are responsible for their own development.The range of training and educational courses we offer helps us raiseawareness of this among our employees. It also fulfils an important role inkeeping USG People properly staffed. The training and educationalcourses on offer play into the ambitions and needs of young talents, whileat the same time ensuring that older, more experienced employees areable to maintain their level of knowledge skills and to share these withyounger generations.

PERFORMANCE MANAGEMENTEach indirect employee of USG People participates in the performancemanagement process according to an annual cycle of planning, performingand assessing. At the start of the year targets are set in consultation witheach employee both with respect to competency development andbusiness results. Progress is assessed midway through the year and theemployee’s development and results achieved are assessed at the end ofthe year. The final assessment of the employee provides valuable input foridentifying talent in the organisation.

LEADERSHIP DEVELOPMENT AND TALENT MANAGEMENTUSG People aims to achieve a leadership style based on trust andresponsibility with scope for personal leadership, whereby the strategy isput into practice 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.


STAKEHOLDERS—


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-day

activities. 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 them

SENIOR AND MIDDLE MANAGEMENT—- Room for personal leadership- Trust and responsibility- Promote advancement and succession- Integrated programme structure

COMPANY-WIDE— - Long-term employability- Maximising talent- Onboarding programme- Training and courses- Performance management- Leadership development and talent management- Business principles



with 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 our

clients 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 withsuppliers 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 the



company. 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.

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 sametime 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.

development of dividend in euros

0.00

0.20

0.40

0.60

0.80

1.00

cash dividend optional dividend stock dividend

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014



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—


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

It 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 careers.

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.

VISIONOur 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.

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 corecountries: the Netherlands, Belgium, France and Germany. Thesecountries form a market currently valued at more than € 50 billion, which

provides fundamentally good opportunities for growth and healthyreturns. Secretary Plus and USG Professionals also operate outside of thecore countries in a few countries with promising markets to grow theirservices.

In 2013 and 2014 we invested in technology-driven concepts and businesssolutions with which we strengthened our innovative potential and laid thebasis for the next stage in the development of our organisation. Ourstrategy leads to the maximisation of talents, financial and social valuecreation for all stakeholders, and therefore to a sustainable businessmodel.

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 organising flexible staff in a cost-effective way. Start People maintainsa vast network of candidates with a wide range of profiles and has a clientnetwork across all sectors. As an HR business partner Unique is mainlyfocused on clients in the SME segment and on providing specialist officeplacements at large organisations. The composition of Unique’s candidatenetwork is diverse and services are provided in every sector.Secretary Plus and USG Professionals are focused on specific profiles.Secretary Plus provides HR solutions for management support andUSG Professionals is focused on providing solutions for highly skilledprofiles in the expert fields of engineering, finance, HR, ICT, legal,marketing and communication, and science.

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


MISSION, VISION 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 Managed Service Providers (MSPs),Recruitment Process Outsourcing (RPO), career transition andperformance and development management.

online business solutionsAdver-Online provides a cloud-based online suite of HR and recruitmenttools and solutions, such as assessments, job marketing, employerbranding, an applicant tracking system (ATS), training, HR consultancyservices, timekeeping, and payrolling of permanent and flexibleemployees.

Netwerven gives clients the opportunity to make their recruitmentprocesses more effective and efficient by using tailor-made werkenbijwebsites (recruitment websites), making recruitment processesmeasurable, improving the findability of vacancies through search engineoptimisation (SEO) and search engine advertising (SEA), setting up andrunning online recruitment campaigns, and using social recruitment forexample by means of its own Refurls tool.

Blue Carpet provides clients with community-based total talentmanagement solutions aimed at identifying, attracting and developing andsecuring talent for organisations. At the same time, using the Ixxer TalentProfiel (also called ePortfolio or competency passport) Blue Carpet makesit possible for individuals – varying from students, jobseekers, permanentor flexible employees to self-employed professionals – to shape personalinsights 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. A VMS structures the entire business process betweenclients and various providers of flexible staff, such as staffing agencies,

self-employed people with no staff (so-called zzp’ers) and consultancyfirms. The process supports the full chain from request, vacancy andproject placement by the client to invoicing. The online marketplaceenables clients to make assignments, projects or vacancies available inthe 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 candidates’ 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 our networks and knowledge – and theuse of new, technology-based services are mutually reinforcing in theirdevelopment and in the creation of new shared opportunities to provideadded value to client and candidate solutions.

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 USG Professionals. The first track is also aimedat developing more practical and accessible solutions in the field of HRmanagement. The main focus of the second track is to innovate ourbusiness models and make them scalable, e.g. through the transformationto online distribution. This track is also focused on developing new, high-value services 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.



strengthening existing leadership positionsOur strategy is primarily aimed at strengthening our market positionswithin our existing geographical scope. Even though the provision of onlineservices is not bound by national borders, the star brands are not lookingto expand their geographical reach at this time. New concepts, developedin-house or acquired, are mainly meant to aid the further development ofthe services we provide for clients and candidates in the existingcountries, resulting in a greater competitiveness, higher revenue androbust 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. Companies are also expected to increasingly use online servicesfor their staffing organisation as well as more comprehensive business

solutions such as MSPs and RPO. These are areas where we can provide agreat 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 by 20% 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 candidates. 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 model due to the high useof the internet and mobile phones. Successfully developed models andbest practices are then applied in the neighbouring countries where weare present as well as in countries outside of our existing area ofoperations.

Expanding high added-value conceptsIn a number of our operating countries flexible employment services suchas temporary staffing and in a number of countries secondment haveevolved into a more mature stage. Combined with a number of changes tolegislation and regulations, such as the introduction of equal pay, this hasput pressure on the pricing of the more traditional services we provide. Atthe same time we are witnessing strong demand in the market for themanagement of all types of flexible labour and HR expertise. This providesus, as an established provider of human capital services, with a goodenvironment to enter into fully-fledged strategic partnerships withemployers.

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; manning projects; managing ortaking over HR and recruitment processes; managing the entire flexible

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workforce 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 TARGETOur 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 attracted in thecapital market to finance large strategic takeovers. We have creditfacilities amounting to € 560 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 whenworking 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 target, as discussed above.



amounts in thousands of euros unless otherwise stated 2014 2013

CONSOLIDATED INCOME STATEMENTRevenue 2,355,032 2,270,031Growth 3.7% -7.0%Operating income 67,173 41,300Growth 62.6% 137.5%As a percentage of revenue 2.9% 1.8%Net income 25,855 -26,058Growth 199.2% 86.4%As a percentage of revenue 1.1% -1.1%Operating cash flow 71,079 26,186Dividend 12,953 11,268

CONSOLIDATED BALANCE SHEETNon-current assets 859,888 843,935Current assets - current liabilities -121,168 -124,732

738,720 719,203

Equity 477,104 458,335Non-controlling interests 1,824 1,249Non-current liabilities 259,792 259,619

738,720 719,203

OTHER KEY FIGURESEquity / total assets 39.1% 38.5%Current assets / current liabilities 0.75 0.73

Number of shares as at 31 December (nominal € 0.50) 80,957,360 80,483,677

PER SHARE (NOMINAL VALUE € 0.50) IN EUROsNet income 2) 0.32 -0.33Operating cash flow 2) 0.88 0.33Dividend 0.16 0.14Equity 5.89 5.69

1) The divestment of the General Staffing activities and changes to IAS 19 'Employee benefits' resulted in a restatement of the 2012 figures2) Based on average number of shares outstanding


TEN-YEAR OVERVIEW—


2012RESTATED1) 2011 2010 2009 2008 2007 2006 2005

2,441,954 3,244,772 3,098,630 3,001,134 4,024,965 3,887,681 3,536,836 1,977,609-24.7% 4.7% 3.2% -25.4% 3.5% 9.9% 78.8% 52.1%

-110,206 -4,386 43,094 760 116,665 243,859 194,206 64,185-2412.7% -110.2% 5570.3% -99.3% -52.2% 25.6% 202.6% 74.1%

-4.5% -0.1% 1.4% 0.0% 2.9% 6.3% 5.5% 3.2%-191,179 -40,159 15,293 -30,965 16,885 140,011 110,853 21,077-376.1% -362.6% 149.4% -283.4% -87.9% 26.3% 425.9% -12.9%

-7.8% -1.2% 0.5% -1.0% 0.4% 3.6% 3.1% 1.1%29,037 104,609 105,569 226,317 276,510 201,389 165,151 114,974

9,566 13,336 12,432 - 37,688 51,581 45,445 12,593

903,993 1,127,701 1,148,359 1,172,434 1,200,115 1,086,958 1,066,482 1,099,438-164,300 -271,445 -137,972 -138,920 26,721 107,030 -2,729 -32,989739,693 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753 1,066,449

488,924 695,253 740,244 638,812 669,777 684,684 574,420 472,209551 542 554 529 1,402 1,028 1,129 2,264

250,218 160,461 269,589 394,173 555,657 508,276 488,204 591,976739,693 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753 1,066,449

36.4% 42.0% 44.2% 38.9% 34.0% 34.9% 30.2% 22.9%0.73 0.66 0.79 0.77 1.04 1.14 0.90 0.97

79,715,875 78,448,505 77,702,427 70,682,433 70,633,400 63,679,719 63,117,700 62,969,532

-2.41 -0.51 0.20 -0.44 0.24 2.21 1.76 0.330.37 1.34 1.38 3.20 4.29 3.18 2.62 2.310.12 0.17 0.16 - 0.58 0.81 0.72 0.206.13 8.86 9.53 9.04 10.31 10.75 9.10 7.50



30 APRIL 2015Publication of first-quarter results (before market opens)Analysts’ conference call on first-quarter results

7 MAY 2015Annual General Meeting of Shareholders

31 JULY 2015Publication of second-quarter results (before market opens)Analysts’ meeting and press conference on second-quarter results

30 OCTOBER 2015Publication of third-quarter results (before market opens)Analysts’ conference call on third-quarter results

26 FEBRUARY 2016Publication of fourth-quarter and annual results (before market opens)Analysts’ meeting and press conference on fourth-quarter and annualresults


FINANCIAL CALENDAR—


GOVERNANCE—


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 annual reports (Vaststellingsbesluit nadere voorschrifteninhoud jaarverslag) as last amended as of 22 July 2013 (the ‘Decree’).

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 period2011-2014 came into force on 1 January 2011. 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.

The remuneration policy was set by the shareholders at the GeneralMeeting of Shareholders on 26 May 2011 who thereby assented to the factthat with regard to severance pay in the event of a change of controlUSG People is in deviation from the provisions of the Code. Theremuneration policy for 2015-2018 that will be presented for adoption tothe General Meeting of Shareholders in May 2015 will also incorporate theaforementioned deviation. Furthermore the remuneration policy for2015-2018 that has yet to be adopted deviates from the provision thatshares granted without any financial consideration must be held for atleast five years (best practice provision II.2.5).

The chairman of the Supervisory Board, Cees Veerman, also assumed therole of interim chairman of the remuneration and appointmentscommittee from 8 May 2013 to 8 May 2014. His chairmanship of the

remuneration and appointments committee deviates from best practiceprovision III.5.11 of Code. Willemijn Maas took over the role of chairman ofthe remuneration and appointments committee with effect from 8 May2014, meaning that there is no longer a deviation from the Code on thispoint.

The General Meeting of Shareholders on 8 May 2013 was informed aboutthe temporary chairmanship of the remuneration and appointmentscommittee by Cees Veerman. No objections were raised by the GeneralMeeting of Shareholders to this temporary deviation from the Code.

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

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THE DUTCH CORPORATEGOVERNANCE CODE—


At 31 December 2014 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€ 40,478,680, consisting of 80,957,360 ordinary shares. Each ordinaryshare represents one vote.

BUYBACK OF OWN SHARESAt the General Meeting of Shareholders on 8 May 2014 shareholdersauthorised the Executive Board – with the approval of the SupervisoryBoard – to buy back USG People shares for a period of 18 months as from8 May 2014. 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 8 May

2014; and• the price must be between the nominal value and 110% of the stock

market value.

ISSUE OF SHARES AND PREFERENCE RIGHTSThe Executive Board is designated as the body authorised to takedecisions regarding the issue of shares – subject to the approval of theSupervisory Board and in accordance with the stipulations of the Articlesof Association and legal provisions. This authority relates to a maximum of10% of all shares of the issued capital of USG People as at the momentthe Executive Board is designated as the authorised body. Every year theGeneral Meeting of Shareholders is requested to extend this period for aperiod of 18 months from the date of General Meeting of Shareholders.

Every year the General Meeting of Shareholders is customarily requestedto extend the period for which the Executive Board is designated as thebody authorised to limit or exclude legal preferential rights. The extensionapplies to the same period for which the Executive Board is authorised toissue shares. The Executive Board will only exercise this authority if it is inthe best interests of USG People to do so.

STICHTING PREFERENTE AANDELENThe foundation ‘Stichting Preferente Aandelen USG People’ (hereinafterreferred to as: ‘the Foundation’) was established in 2009. In accordancewith its Articles of Association, the Foundation shall endeavour to servethe best interests of USG People, its associated business and all partiesconnected to it, warding off as much as possible any influences that couldconflict with the continuity, independence and identity of the company.These influences may result from a (considerable) interest in USG Peoplebuilt up by a third party, the announcement of a public offer or otherconcentration of control, or any other form of unreasonable pressure

exercised on the company to change the (strategic) policies ofUSG People.

The Articles of Association of USG People provide for the possibility ofissuing preference shares as a temporary protective measure. USG Peopleconsiders it undesirable for preference shares to remain outstanding forany longer than is strictly necessary. Accordingly, article 7.8 of the Articlesof Association of USG People stipulates that in the event of the issue ofpreference shares a General Meeting of Shareholders shall be held nolater than 18 months after the initial issuance of these shares. A decisionconcerning the buyback or cancellation of the preference shares must beput on the agenda for that meeting.

USG People has granted the Foundation a call option to take uppreference shares. The call option is divided into two parts: the first calloption entitles the Foundation to take 30% (minus one share) of the votingrights. The second call option grants the Foundation the right to take100% (minus one share) of the total issued capital, i.e. shares other thanpreference shares, issued at that time. This second call option can only beexercised, in whole or in part, after the announcement of a public offer forall shares in USG People, as referred to in Article 5:71 sub 1 part c of theDutch Financial Supervision Act. The call option agreement means thatthe decision to issue preference shares lies with the Foundation and notwith the Executive Board, nor the Supervisory Board of USG People.

In addition to the aforementioned call options, the Foundation also hasthe right of inquiry. The Foundation can make use of this right in situationswhere it may not wish to exercise its right to take preference shares butwhich, in the opinion of the Foundation, justify the need for legalintervention in view of the definition of its objects in the Articles ofAssociation.

The Foundation will operate independently from USG People. In doing so,it is in compliance with the requirements stipulated in the Dutch FinancialSupervision Act with respect to a foundation of this type. In 2014 theboard of the Foundation consisted of Messrs R. Pieterse (chairman), J.F.van Duijne and Professor M.W. den Boogert. The board members havedrawn up a retirement schedule aimed at ensuring the continuity,knowledge and expertise of the Foundation.

MAJOR HOLDINGSUnder the Dutch Financial Supervision Act, shareholders are required toreport holdings that exceed certain set percentages to the NetherlandsAuthority for the Financial Markets (AFM).

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CAPITAL STRUCTURE ANDPROTECTIVE MEASURE—


Under the Dutch Financial Supervision Act the following interests weredeclared on 31 December 2014:

Alex Mulder 19.9%Dimensional Fund Advisors, L.P. 3.6%

SECURITIES TRANSACTIONSMembers of the Executive Board and Supervisory Board must comply withthe so-called Model Code. This regulation sets out how transactionsinvolving securities of USG People should be conducted and prohibitstrading during the so-called closed periods. Responsibility for Model Codecompliance checks lies with the USG People Compliance Officer.

In addition to the Model Code, members of the Executive Board andSupervisory Board are bound to the Tracking Compliance Programme,which sets out the rules for monitoring transactions involving thesecurities of direct competitors, the so-called Peer Group. Anytransactions involving securities in these companies must be reported inadvance to the USG People Compliance Officer. Transactions involvingsecurities of companies outside the Peer Group do not require priorpermission; nor are they subject to a regular reporting obligation.

CONFLICTS OF INTERESTAny transactions involving a potential conflict of interest for members ofthe Executive Board or Supervisory Board and are of material significanceto the company and/or the relevant person (the person involved/concerned) must be published in the annual report. Under the Code, anysuch transactions are subject to agreement under the conditionscustomary for the sector. During 2014 no transactions of materialsignificance took place which could be qualified as involving a conflict ofinterest. Provisions aimed at preventing conflicts of interest with respectto such transactions are included in the Regulations of the ExecutiveBoard and the Regulations of the Supervisory Board. The othertransactions with the large shareholder are expanded on in the financialstatements, see note 27.

DISCLOSURES PURSUANT TO ARTICLE 10 OF THE TAKEOVER DIRECTIVEDECREEPursuant to Article 10 of the Takeover Directive Decree companies whoseshares are admitted to trading on a regulated market must discloseinformation in their annual report on matters including the capitalstructure of the company and the existence of any shareholders withspecial rights. In accordance with these requirements USG People herebymakes the following disclosures:

1. For information on the capital structure of the company, the capitaland the existence of different types of shares, please refer to thenotes to the consolidated financial statements in this annual report.

For information on the rights attached to these shares, please refer tothe company’s Articles of Association which can be found on thecompany’s website.

2. The company has imposed no restrictions on the transfer of shares.3. For information on equity stakes in the company to which a

notification requirement applies (pursuant to Articles 5:34, 5:35 and5:43 of the Dutch Financial Supervision Act), please refer to theinformation included in the ‘Large shareholders’ section of thisannual report. A list of shareholders who are known to the companyto have holdings of 3% or more at the stated date can be found here.

4. There are no special control rights or other rights associated withshares in the company.

5. USG People operates a share bonus scheme for the Executive Boardand senior management. Please refer to the remuneration report forfurther information.

6. No restrictions apply to voting rights associated with the company'sshares, nor do any deadlines exist for exercising voting rights.

7. No agreements with shareholders are known to the company to existwhich may result in restrictions on the transfer or limitation of votingrights.

8. The rules governing the appointment and dismissal of members ofthe Executive Board and the Supervisory Board and amendment ofthe Articles of Association are stated in the company’s Articles ofAssociation. To summarise, the Dutch large company regime isapplicable to the company. Members of the Executive Board areappointed and dismissed by the Supervisory Board, with the provisothat the General Meeting of Shareholders must be consulted prior tothe dismissal of a member of the Board of Management. SupervisoryBoard members are nominated by the Supervisory Board andappointed by the General Meeting of Shareholders. The WorksCouncil has an enhanced right of recommendation for one-third ofthe number of Supervisory Board members. The General Meeting ofShareholders can declare a vote of no confidence in the SupervisoryBoard by an absolute majority of votes cast, representing at leastone-third of issued capital. Such a vote of no confidence shall resultin immediate dismissal. An amendment of the company’s Articles ofAssociation requires a decision by the General Meeting ofShareholders in response to a proposal made by the Executive Boardwith the approval of the Supervisory Board.

9. The powers of the Executive Board are set out in the Articles ofAssociation. The powers of the Executive Board in respect of theissuance of shares in the company are set out in article 7 of thecompany’s Articles of Association. To summarise, the GeneralMeeting of Shareholders – or the Executive Board if authorised by theGeneral Meeting of Shareholders – takes the decision, subject toprior approval by the Supervisory Board, to issue shares, whereby theissue price and other conditions relating to the issue are determinedby the General Meeting of Shareholders – or the Executive Board if

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http://www.usgpeople.com/investor-information/corporate-governance/articles-of-association

http://www.usgpeople.com/investor-information/corporate-governance/articles-of-association

http://www.usgpeople.com/investor-information/corporate-governance/remuneration

authorised. In the event the Executive Board is designated as thebody authorised to take decisions with respect to the issue of shares,the number of shares that may be issued as well as the term of thedesignation is determined at the time of such designation. Theprocedures governing the acquisition and disposal by the company ofshares in its own capital are set out in article 10 of the Articles ofAssociation of the company. To summarise, the Executive Board maydecide, subject to authorisation by the General Meeting ofShareholders and to prior approval by the Supervisory Board, that thecompany may buy back fully paid-up shares of its issued capital.Decisions regarding the disposal of shares acquired by the companyare taken by the Executive Board, subject to prior approval by theSupervisory Board.

10. With the exception of the option agreement with Stichting PreferenteAandelen USG People concerning the placement of preference shareswith the Foundation, the company is not a party to any significantagreements which take effect or are altered or terminated upon achange of control of the company as a result of a public offer withinthe meaning of Article 5:70 of the Dutch Financial Supervision Act.The General Meeting of Shareholders of 23 December 2008 decided togrant Stichting Preferente Aandelen USG People the right to acquirepreference shares.

11. The company has entered into agreements with members of theExecutive Board which provide for a pay-out on termination of theiremployment as a result of a public offer within the meaning of Article5:70 of the Dutch Financial Supervision Act.

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A General Meeting of Shareholders is held at least once a year. The agendawith notes, the annexes and the registration process are published withthe notice convening the meeting and are available on the USG Peoplewebsite. The annexes contain all relevant information with regard toresolutions on the agenda. All decisions are taken based on the ‘oneshare, one vote’ principle. Resolutions are adopted by an absolutemajority of votes, unless otherwise provided by law or in the Articles ofAssociation of the company.

The annual accounts are signed off by the Executive Board and theSupervisory Board and are submitted annually to the General Meeting ofShareholders for adoption.

The General Meeting of Shareholders has control of important mattersincluding:• adopting the financial statements;• profit appropriation;• approving amendments to the Articles of Association;• deciding on the remuneration policy of the Executive Board;• deciding on the remuneration of the Supervisory Board;• transferring the company or virtually the entire company to a third

party;• designating the body authorised to issue ordinary shares and to grant

rights to obtain ordinary shares in the capital of USG People;• designating the body authorised to restrict or exclude preference

rights;• authorising the purchase of shares in the capital of USG People;• appointing the external auditor;• discharging the Executive Board and the Supervisory Board.

The minutes of the General Meeting of Shareholders are made availablevia the website of the company no later than three months after themeeting, after which shareholders have a period of three months torespond.

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GENERAL MEETING OFSHAREHOLDERS—


from left to right: Leen Geirnaerdt and Rob Zandbergen

ROB ZANDBERGEN, CEORob Zandbergen (1958) has been CEO of USG People N.V. since 1 July 2010and has been active in the temporary employment sector since early 2002.In addition to his work at USG People, Rob is a member of the supervisoryboard of the Dutch Flower Group. Rob graduated from the RoyalNetherlands Military Academy in Breda, where he specialised inadministration and economics, after which he studied businesseconomics at the University of Amsterdam. Rob has held various nationaland international executive and supervisory positions at publicly listedcompanies. Rob Zandbergen holds Dutch nationality.

LEEN GEIRNAERDT, CFOLeen Geirnaerdt (1974) joined the Executive Board of USG People N.V. asChief Financial Officer on 1 November 2010. Leen started her career atPricewaterhouseCoopers, where she worked as an auditor and managerfor six years before moving to Solvus Resource Group in the position ofCorporate Controller. After the acquisition of Solvus NV by USG PeopleLeen Geirnaerdt held various senior management positions, including thatof General Manager of USG People Belgium’s Shared Service CenterTransactions & Support from 2008. Leen studied Applied Economics withan Accountancy option at the University of Antwerp. Leen Geirnaerdt holdsBelgian nationality.

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EXECUTIVE BOARD—


Following the strategic alignment of activities in the four star brandsStart People, Unique, Secretary Plus and USG Professionals thegovernance structure was transformed into an efficient and effectivemanagement system. The size and complexity of our organisation wasconsiderably reduced as a result of the execution of the strategy. Controlis now structured in a more decentralised way with short lines to theExecutive Board and greater independence for the management of theoperating companies. This promotes quick decision-making and a shorttime-to-market. This brings our governance structure in line with ourchanged organisation and ensures it can contribute fully to the executionof the strategy in the current market.

DAY-TO-DAY MANAGEMENTAPPOINTMENT AND DISMISSAL OF MEMBERS OF THE EXECUTIVE BOARDThe members of the Executive Board are appointed by the SupervisoryBoard. The Supervisory Board nominates one or more candidates forappointment and informs the General Meeting of Shareholders of theproposed appointment. In principle the Supervisory Board appointsmembers of the Executive Board for a four-year term, unless there arecompelling reasons for deviating from this. At the conclusion of the four-year term, the member of the Executive Board can be reappointed, inaccordance with best practice provision II.1.1. of the Dutch CorporateGovernance Code. In 2014 the current members of the Executive Boardwere each reappointed for a period of four years ending at the conclusionof the 2018 General Meeting of Shareholders.

The Supervisory Board may suspend or dismiss a member of the ExecutiveBoard at any time, provided that no member of the Executive Board isdismissed before the General Meeting of Shareholders has expressed itsviews on the dismissal.

DUTIES OF THE EXECUTIVE BOARDThe Executive Board manages the business on a day-to-day basis and isresponsible for the strategy, for setting and realising targets and forachieving results. The Executive Board is also responsible for the qualityand completeness of the financial reports published by the company, forrisk management and control mechanisms, for compliance with legislationand regulations and for the financing of USG People.

The Executive Board is bound by the regulations of the Executive Board inaddition to regulatory requirements and the relevant provisions of theArticles of Association. The regulations of the Executive Board clearlystate the division of duties of the individual directors. For example, theregulations state that the CEO’s duties include being responsible forstrategy, corporate sales & marketing, HR, innovation, Corporate SocialResponsibility, internal audit and the performance of duties by theexternal auditor. The scope of the CFO’s duties includes responsibility for

financial reporting, communication & investor relations, ICT, legal, tax andtreasury.

Individual members of the Executive Board can specifically be responsiblefor certain management duties, without prejudice to the collectiveresponsibility of the Executive Board as a whole. The Executive Boardremains collectively responsible for decisions, even if these have beendrafted by individual members of the Executive Board. The ExecutiveBoard is collectively authorised to represent the company both in judicialand other matters. The power of representation is jointly granted to twomembers of the Executive Board. This also applies for other directors,barring any legal and/or statutory reserves provided for by the Articles ofAssociation. This is stipulated in the Corporate Delegation of AuthorityScheme.

COMPOSITION OF EXECUTIVE BOARDThe Executive Board consists of two people, namely Rob Zandbergen(CEO) and Leen Geirnaerdt (CFO). That means that the percentage ofwomen on the Executive Board was 50% in 2014. That means that theExecutive Board of USG People meets the 30% requirement stipulated inthe Dutch Act on Management and Supervision.

REMUNERATIONIn line with the remuneration policy that was adopted by the GeneralMeeting of Shareholders in May 2011, the remuneration of the members ofthe Executive Board is determined by the Supervisory Board on the adviceof the remuneration and appointments committee. The composition andamount of the remuneration, as well as an account of the remunerationpolicy, is included in the remuneration report. The main elements of thecontracts with the Executive Board members are included in the ‘principlefeatures of the remuneration report’ in this annual report. The completeremuneration report can be found on the company’s website.

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GOVERNANCE STRUCTURE—



GENERAL PRINCIPLES OF OUR RISK MANAGEMENTManaging risks well and seizing opportunities is crucial for creating valuefor USG People’s stakeholders. Risk management is an integral part of ourday-to-day business operations. Opportunities and threats are identifiedin a timely manner and managed within the context of our risk tolerance.We pursue a policy aimed at safeguarding the continuity of our operationswhile maintaining a healthy balance between risk and returns. This isevident in the manner in which we deal with different types of risk. Ourrisk acceptance for operational risks is limited. With regard to financialrisks we pursue a stable financial policy with minimal, manageable risks.And a zero tolerance policy is applied with respect to compliance withlegislation and regulations. Where necessary and possible we take outappropriate insurance with third parties to limit the possible impact ofthose risks.

RISK MANAGEMENT MODELRegular risk sessions are held within our operations to identify the mainrisks. Measures are taken or existing control measures are adjusted ifnecessary. The status of the risks and measures is reported to theCorporate Audit & Risk Management department on a quarterly basis.Corporate Audit & Risk Management reports the risks identified to theExecutive Board which in turn organises an annual risk managementsession and an update session six months later. The outcome of thesessions held by the Executive Board results in a determination of andinsights into the main current risks for USG People. Plans of action aredrafted, taking into account risk-mitigating measures that have alreadybeen taken. This process enables USG People to keep its risks withinacceptability parameters and to safeguard the implementation of risk-mitigating measures. The main risks for USG People are discussed withthe Supervisory Board on a regular basis. A description of our main riskscan be found in the executive report.

OUR INTERNAL RISK MANAGEMENT AND CONTROL SYSTEMSThe internal risk management and control systems at USG People consistof a combination of tools shown in the following diagram. The systems arebased on the COSO ERM model.

It is the responsibility of the Executive Board to establish internal riskmanagement systems and to monitor and safeguard their performanceand effectiveness. It goes without saying that the completeness of suchsystems cannot be guaranteed. The elements of the risk management andcontrol systems are explained in more detail below.

GOVERNANCE FRAMEWORKIt goes without saying that the framework for USG People is defined byexternal laws and regulations. We operate with local specialists to closelymonitor legislation and regulations and to respond to changes in a timelymanner. We also apply internal guidelines such as a code of conduct,

business principles, whistleblower policy, anti-fraud policy and corporateauthorisation matrix. Together these guidelines form the controlframework within which USG People aims to achieve its objectives. Thecurrent set of guidelines, drawn up by the corporate departments, isavailable for all our employees at all times. New employees are given theguidelines when they commence their employment. The Corporate Audit &Risk Management department reviews the embedding of the guidelineswithin the organisation. Familiarity with these guidelines and theiravailability is a point of attention during each audit of our operations. TheExecutive Board and the audit committee are informed about this andadditional measures are taken if necessary.

ACHIEVEMENT OF OBJECTIVESThe objectives and strategy are the starting points for our tactical andoperational planning and the activities through which we seek to achieveour objectives.

STEERING MECHANISMSSteering mechanisms are needed to achieve the objectives within thegovernance framework. These include the financial and operationalplanning and control cycles, such as the monthly and quarterly reporting,at every level of the organisation. These are supported by manuals,procedures and a detailed accounting manual outlining the principles ofvaluation and determination of results. There are direct reporting linesbetween the Executive Board and the boards of the star brands. Everymonth the members of the Executive Board hold a meeting with theboards of the star brands and the shared service centres to discuss theservices they provide to their clients, financial and operationalperformance, forecast, risk management and the progress made inachieving the strategic objectives. All parties involved work togetherclosely to improve the planning and control cycles. In addition to themonthly planning and control cycles the forecasts for the upcoming yearare set in the fourth quarter based on forward-looking macro-economictrends, sector-specific information and the monthly performance of thestar brands, followed by three forecast moments during the year. Reportsare modified if management information needs change to ensure effectivegovernance.

GOVERNANCE BY THE EXECUTIVE BOARD AND MANAGEMENTThe Executive Board is responsible for the proper functioning of the riskmanagement and control model, as described above. This responsibility ispartly delegated to line managers and staff managers in the organisation.

SUPERVISION AND MONITORINGThe Executive Board is responsible for the design and operation of the riskmanagement and control systems and is accountable to the SupervisoryBoard. This forms the basis of the supervision by the Supervisory Board ofthe quality of the risk management and control systems.

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RISK MANAGEMENT AND CONTROLSYSTEMS—


The Supervisory Board receives information from the internal and externalaudit function at regular meetings of the audit committee. Audits areconducted by USG People’s centrally organised internal audit function,which is supported in its activities by a network of local specialists.Assessments carried out by the line management, staff management andinternal audit identify possible areas for improvement in our riskmanagement and control systems. This regular assessment allows theExecutive Board to manage quality internally. It addresses shortcomingsthat emerge from the reports, makes the necessary adjustments andmonitors actions aimed at improvement.

Under the existing governance structure the boards of the operations havethe responsibility to organise and monitor their risk management andcontrol systems independently within the policy and set framework. Theinternal audit department is focused on the manner in which localmanagement is structured and managed its control system.

Fraud and bribery are risks for many organisations. Our Code of Conductcontains regulations pertaining to ethical behaviour and how to deal withidentified deviations from our rules and guidelines on the matter. The riskmanagement and control systems as well as the supervision andmonitoring system are also aimed at preventing fraud. The anti-fraudpolicy comes into effect if fraud is detected and all relevant levels ofmanagement are involved. A similar procedure comes into effect in theevent that active or passive forms of bribery are detected.

STATEMENT OF THE EXECUTIVE BOARD REGARDING THE EVALUATION OFRISK MANAGEMENT AND INTERNAL CONTROL:The Executive Board is aware that risk management and control systems,however extensive they may be, are unable to provide absolute certaintythat all material inaccuracies, losses, fraud and breaches of laws andregulations can be prevented entirely. The policy of the Executive Boardremains focused on constantly monitoring and improving the internal risk

management and control systems in order to make the processes asreliable and effective as possible. The Supervisory Board and auditcommittee in particular are informed on the structure and operation of theinternal risk management and control systems. It is the opinion of theExecutive Board that the risk management and control systemsfunctioned properly in the year under review with respect to the financialreporting risks. These systems provide a reasonable level of certainty thatno material inaccuracies are contained in the financial reporting in thecurrent year.

The Executive Board also declares that to the best of its knowledge:• the financial statements of USG People for 2014 give a true and fair

view of the assets, liabilities, financial position and profit or loss ofUSG People N.V. and companies jointly included in the consolidation;

• the annual report of USG People gives a true and fair view of theposition at the balance sheet date, the course of events during thefinancial year of USG People N.V. and the companies associated with it,the results of which are included in the financial statements;

• the principal risks facing USG People are outlined in the annual report.

CONTROL BY EXECUTIVE BOARD AND OTHER MANAGEMENT LEVELS

SUPERVISION AND MONITORING BY SUPERVISORY BOARD, INTERNAL AUDIT DEPARTMENT AND EXTERNAL AUDITOR

GOVERNANCE FRAMEWORK—Business principles and codes of conduct Corporate policy and regulations Legislation and regulations

REALISATION OF OBJECTIVE—Formulating strategyTactical and operational planningOperational realisation

STEERING MECHANISMS—Planning & control cyclesRisk managementOperational control measures

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APPOINTMENT AND RESIGNATION OF MEMBERS OF THE SUPERVISORYBOARDThe members of the Supervisory Board are appointed by the GeneralMeeting of Shareholders on the recommendation of the SupervisoryBoard. The Central Works Council is given the opportunity in advance totake a position on the appointment of Supervisory Board members. TheGeneral Meeting of Shareholders and the Central Works Council canrecommend people for nomination as a Supervisory Boardmember. Supervisory Board members are appointed for a maximum ofthree four-year terms. Members of the Supervisory Board retire byrotation according to the retirement rota. The deadline for SupervisoryBoard members to step down is the day of the first General Meeting ofShareholders after expiration of the four-year term since their lastappointment.

DUTIESThe Supervisory Board supervises the policy of the Executive Board andthe general developments at the company and its associated business.The Supervisory Board also advises, on request and on its own initiative,on strategic matters and the realisation of corporate objectives. In theperformance of its supervisory duties the Supervisory Board alsoconsiders the social aspects of business practices relevant to USG Peopleand the interests of all stakeholders.

The Supervisory Board acts as the employer of the members of theExecutive Board. As such it appoints, suspends and dismisses themembers of the Executive Board after informing the General Meeting ofShareholders and drafts the remuneration policy with respect to themembers of the Executive Board.

The Supervisory Board must approve decisions pertaining to the followingmatters:• the operational and financial targets of USG People;• the strategy aimed at realising the corporate objectives;• the parameters applying to the strategy, for example with respect to

the financial ratios;• the aspects of corporate social responsibility relevant to the company;• all transactions between USG People and natural persons or legal

entities in possession of at least 10% of the shares in USG Peoplewhich are of material importance to USG People;

• all transactions for which a conflict of interest may exist for themembers of the Executive Board and which are of material importanceto USG People and/or the members of the Executive Board involved;

• all transactions for which a conflict of interest may exist for themembers of the Supervisory Board and which are of materialimportance to USG People and/or the members of the SupervisoryBoard involved;

• the appointment and dismissal of the secretary of USG People;

• the allocation of tasks of the Executive Board to individual members ofthe Executive Board;

• any other acts that require approval by law or as stipulated in theArticles of Association, the Regulations of the Executive Board, theRegulations of the Supervisory Board , the Dutch CorporateGovernance Code or any other applicable rules and regulations.

In addition to existing legal and statutory requirements and provisions, theSupervisory Board has set its own rules to govern its own performanceand that of its committees, with which they must also comply.

COMPOSITION OF SUPERVISORY BOARDThe Supervisory Board consisted of four people until the General Meetingof Shareholders in May 2014: Cees Veerman (chairman), Rinse de Jong,Marike van Lier Lels and Alex Mulder. The terms of Marike van Lier Lels,Rinse de Jong and Alex Mulder expired in 2014. Rinse de Jong and AlexMulder were appointed for a new term by the General Meeting ofShareholders. In addition the Supervisory Board was expanded by two newmembers in May 2014: Willemijn Maas and Johnny Thijs, and has sinceconsisted of five people. The percentage of women on the SupervisoryBoard was 20% at the end of 2014. That means that the Supervisory Boardof USG People does not meet the 30% requirement stipulated in the DutchAct on Management and Supervision. USG People aims to achieve a wideand diverse composition of staff within all levels of the company and willtake the requirements into consideration as much as possible in futureappointments. The Supervisory Board aims to achieve a well-balancedcomposition as stated under the diversity objectives in the SupervisoryBoard profile.

The Supervisory Board has two internal committees: the audit committeeand the remuneration and appointments committee. Each committee hasits own internal regulations which define the duties, responsibilities andprocedures. The regulations, as well as the regulations of the SupervisoryBoard, can be perused via the USG People website.

For the composition of these internal committees as well as a detailedaccount of their activities please refer to the committees’ reports in thereport of the Supervisory Board.

AUDIT COMMITTEEThe tasks of the audit committee include advising the Supervisory Boardwith respect to the operation of the internal risk management and controlsystems. This includes compliance with the relevant laws and regulationsand monitoring the functioning of codes of conduct. The committee’stasks also include policy for and monitoring of the execution of fiscalplanning, financing, the control and assessment of the financial and non-financial reporting process and the application of information andcommunication technology. The chairman of the committee reports the

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SUPERVISION—


http://www.usgpeople.com/investor-information/corporate-governance/regulations

main findings to the Supervisory Board. The documents and minutes ofthe committee meetings are shared with every member of the SupervisoryBoard.

REMUNERATION AND APPOINTMENTS COMMITTEEThe main tasks of the remuneration and appointments committee includeestablishing the profile and size of the Executive Board, submittingproposals to the Supervisory Board with regard to the appointment ofmembers of the Executive Board, determining the remuneration policy andthe remuneration of the individual members of the Executive Board. Thecommittee also assesses the performance of the individual members ofthe Supervisory Board and makes proposals with regard to the size andcomposition of the Supervisory Board. The committee is also responsiblefor determining the desired profile for the members of the SupervisoryBoard and proposing members of the Executive Board. The chairman ofthe committee reports on the main findings to the Supervisory Board.

REMUNERATIONThe members of the Supervisory Board receive a fixed annual salary whichis determined by the General Meeting of Shareholders. Furtherinformation on the composition and amount of the remuneration isincluded in the remuneration report and in the section ‘principal featuresof the remuneration report’ in this annual report.

INDEPENDENCEBest practice provision III.2.1 of the Corporate Governance Code wascomplied with. Alex Mulder operated as CEO of USG People until 9 May2006. He still currently holds more than 10% of the company’s shares.Therefore he may not be considered independent under best practiceprovision III.2.1 of the Code.

DIVERSITY OBJECTIVESThe Supervisory Board has created a profile of its own organisation, takinginto consideration such aspects as nationality, age, gender, experience,expertise and social diversity.

It is the objective of the Supervisory Board to include at least one memberat all times:• who does not hold Dutch nationality;• who has experience in the political, administrative, social, ethical or

academic sector;• who has financial expertise;• who possesses specific experience relating to the operations of

USG People and knowledge about the labour market.

Another objective is to achieve a balanced composition of the SupervisoryBoard with at least 30% of the members being female and at least 30%being male.

The aim of appointments is to ensure the best possible balance anddiversity in the composition of the board.

EXTERNAL AUDITORThe independence of the external auditor is intrinsically valuable. Toensure its independence USG People has drafted the policy included in theannex to the Supervisory Board regulation entitled ‘Policy governing theindependence of the external auditor’. The policy covers the rotation of theexternal auditor, as well as the basic principles of independence.

The General Meeting of Shareholders held in May 2013 appointedPricewaterhouseCoopers Accountants N.V. for a period of three years, i.e.to audit the annual accounts for the 2013, 2014 and 2015 financial years.The auditor’s report is included elsewhere in the annual report.

At the General Meeting of Shareholders on 7 May 2015 the SupervisoryBoard will propose, on the advice of both the Executive Board and theaudit committee, the appointment of KPMG Accountants N.V. asindependent auditor for the 2016, 2017, 2018 and 2019 financial years.Following a careful tender process KPMG Accountants N.V. was deemedthe best based on the applicable criteria, particularly as regards thecomposition and experience of the team.

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from left to right: Willemijn Maas, Johnny Thijs, Cees Veerman, Rinse de Jong, Alex Mulder

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SUPERVISORY BOARD—


CEES VEERMAN1949, Dutch | Chairman | first appointed in 2010 | current term 2012-2016Member of the remuneration and appointments committeeCees Veerman has chaired the Supervisory Board of USG People N.V. since1 March 2010. He was the Dutch minister of Agriculture, Nature and FoodQuality from 2002 to 2007 and CEO of Bracamonte B.V. until September2013. Cees currently holds professorships at the universities of bothTilburg and Wageningen. In addition, he sits on the supervisory boards ofcompanies including Rabobank Nederland, Barenbrug Holding B.V.,Koninklijke Reesink N.V., Postcode Loterij N.V. and Ikazia ZiekenhuisRotterdam. He is also a member of the executive committee of theNetherlands Organisation for Scientific Research (NWO).

RINSE DE JONG1948, Dutch | first appointed in 2010 | current term 2014-2018Chairman of the audit committeeRinse de Jong joined the USG People N.V. Supervisory Board on20 December 2010. A registered accountant, Rinse was most recentlyemployed as Chief Financial Officer of Essent, where he was alsoresponsible for risk management and IT. He is chairman of the supervisoryboard of N.V. Nederlandse Gasunie and sits on the supervisory board andchairs the audit committee of Enexis Holding N.V. He is also chairman ofthe supervisory board of Bakeplus Holding B.V., a member of thesupervisory board of Rabobank Arnhem en omstreken and a member ofthe Boards of Supervision of Stichting Toneelgroep Oostpool and ofHogeschool van Amsterdam. Rinse is an executive committee member ofthe foundation Stichting Aandelenbeheer BAM Groep and of theFoundation for the holding of priority shares in the public limited liabilitycompany Wereldhave.

WILLEMIJN MAAS1959, Dutch | first appointed in 2014 | current term 2014-2018Chairman of the remuneration and appointments committeeWillemijn Maas joined the Supervisory Board of USG People N.V. on 8 May2014. Prior to her appointment she was the general director of Dutchbroadcasting organisation AVRO for eight years, a position she resignedfrom following the merger of AVRO with fellow broadcasting organisationTROS. Prior to that Maas had a long association with AmsterdamUniversity of Applied Sciences, where she started teaching before holding

various management positions and eventually becoming a member of theExecutive Board of the University, first at the Institute of LaboratoryEducation and later at the Institute of Management and Economics. In thelatter job she co-managed the merger with the HES Higher School ofEconomics and the cooperation agreement with the Economics faculty ofthe University of Amsterdam. Willemijn’s last-held position at AmsterdamUniversity of Applied Sciences was Chairman of the Board of the mergedEconomics Institutes and she has been an independent consultant andinterim manager since September 2014. She is also a member of theSupervisory Board of the Amsterdam Port Authority and a member of theSupervisory Committees of the Prins Bernard Cultuurfonds cultural fundand Unicef Netherlands. She has chaired the Nationaal Restauratiefondssince December 2014.

ALEX MULDER1946, Dutch | first appointed in 2006 | current term 2014-2018Member of the remuneration and appointments committeeAlex Mulder founded Unique Uitzendburo in 1972, which by consequencemakes him the founder of USG People N.V., of which he was chairman andCEO until 2006. At the General Meeting of Shareholders in 2006 Alex wasappointed to the USG People N.V. Supervisory Board. Alex is also adelegated director of Amerborgh International N.V., a managementcompany with investments and stakes in companies, in the field of assetmanagement, cross-media expenditure, property development, and artand culture.

JOHNNY THIJS1952, Belgian | first appointed 2014 | current term 2014-2018Member of the audit committeeJohnny Thijs joined the Supervisory Board of USG People N.V. on 8 May2014. He obtained a degree in Business Engineering from Belgium’sLimburg Business School in 1974. After various management positions atlarge multinationals including AB InBev, Kraft-Jacobs-Suchard and MarsInc., he held the post of CEO of bpost – the Belgian post company whichobtained a stock market listing in June 2013 under his guidance – until theend of February 2014. Johnny is chairman of the Executive Boards ofSpadel N.V. and Max Green n.v., a member of the executive boards ofDelhaize Group, the Red Cross Flanders and logistics services providerH.Essers. He is also an advisor to Lazard Frères Benelux and CVC Belgium.

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After the transition of the organisation in 2013 USG People has set out in anew direction with four star brands focused on four neighbouring corecountries. These countries offer excellent structural opportunities toprovide these services, with increasing added value, to our clients. In 2014we were pleased to note that this resulted in growth and improvedprofitability.

2014 was mainly devoted to further shaping and expanding our starbrands. Another point of attention was the development and launch ofinnovative applications that make it possible to offer our clients newbusiness propositions. Structural progress was made on both frontsduring the year, representing a concrete manifestation of our strategy.

ACTIVITIESIn 2014 the Supervisory Board held seven plenary meetings, in accordancewith the fixed schedule. The chairman was in regular contact with the CEOin the periods between meetings to discuss the general state of affairsand current issues. At the meetings the Supervisory Board was informedabout a number of different topics, including the progress made in theexecution of the strategy, M&A projects, legal issues, marketdevelopments, operational and financial performance, and the outlook.Discussions within the Supervisory Board were generally based ondocuments and presentations provided by the Executive Board. Inpreparation, many of the topics were discussed in advance in meetings ofthe audit committee or the remuneration and appointments committee.

In view of its task of supervising the operations in the business, theSupervisory Board invited one or more general managers or corporatedirectors to all meetings, with the exception of the meeting held inOctober, to inform it about various developments and projects, includinginitiatives aimed at innovation and SR projects, as well as the progressand developments at the different star brands.

The Supervisory Board is in regular contact with the Central Works Counciland employees from various levels of the organisation in order to stayinformed about the situation in the workplace. Prior to their appointmentin 2014 Willemijn Maas and Johnny Thijs also held extensive discussionswith the Central Works Council before the Council defined its position. TheCentral Works Council subsequently issued a positive opinion on theproposed appointments of Willemijn Maas and Johnny Thijs.

ATTENDANCEIn 2014 the members of the Supervisory Board attended virtually everymeeting. The chairman of the Supervisory Board was unable to attend onemeeting due to personal circumstances so Marike van Lier Lels assumedthe chairmanship during that meeting. Alex Mulder was unable to attendone meeting and Johnny Thijs was not present at two meetings forscheduling reasons. Instead they provided their input in advance and

designated another member of the Supervisory Board to assume theirduties.

MEETINGS OF THE SUPERVISORY BOARDIn 2014 the Supervisory Board spoke at length about the strategicdirection within the context of current market trends and the steps takenin this respect. Other topics discussed at various meetings includeddevelopments and the outlook for USG People in light of macroeconomicdevelopments as well as the progress achieved in the operational andfinancial results. In the performance of its supervisory tasks theSupervisory Board aims to achieve a good balance between the interestsof all the company’s stakeholders.

STRATEGYIn the course of the year a great deal of time was spent discussingstrengthening the existing market positions of USG People throughcommercial focus and investments in online propositions. Variousinvestment opportunities were discussed during the meetings, includinginvestments in Blue Carpet, Netwerven and Connecting-Expertise. Otherareas of attention included our own innovative initiatives such as Solvus,Unique’s HR Office concept and Assistant Plus, Secretary Plus’ onlineconcept. These concepts will be rolled out further to expand theleadership positions and positions in growth markets. Other discussionsdealt with the distinctive features of each brand and the commercial planof action for the SME market. The star brands each approach the marketwith their own distinctive features but the common interest must beparamount. The cooperation between the star brands further improved asa result of the change in governance and adjusted management structure,making them able to approach the market more commercially andeffectively. Within the framework of the execution of Project United, whichstarted in 2013 and was aimed at making USG People more competitive,the progress of sub-projects (including with regard to lead times) and thetotal structural savings of Project United were closely monitored.Extensive discussions were also held on the strategic target for the debtposition which was tightened from no more than two times EBITDA to nomore than one time EBITDA after due consideration in December 2014.

RESULTSIn the course of the year the improvement in the operational and financialresults was discussed. The Supervisory Board regularly discussed topicssuch as the development of revenue and gross margins and improvementsin the cost structure with the members of the Executive Board. Otherareas of attention were the balance sheet and particularly the positivedevelopment of the debt position.

Other topics of discussion were the expectations for the various marketsin relation to the economic developments in Europe, as well as the relativeperformance of USG People compared to its peers. Detailed talks were

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REPORT OF THE SUPERVISORY BOARD—


also held with the external auditor about the annual statements and the2013 annual report. The 2015 budget was another topic, also in relation tothe general expectations with regard to economic developments.

Various discussions were also held with the Executive Board about thecurrent status and developments with regard to legal claims and thepossible impact of changes in laws and regulations, including the DutchWork and Security Act which was passed in 2014 and came into effect in2015.

STAKEHOLDERSOther topics discussed in meetings related to representing the interests ofUSG People’s various stakeholders, including developing services andadded value for clients, the dividend policy and the development of theshare price for shareholders, development opportunities and successionplanning for the company’s own staff, making flex workers moresustainably employable and helping people in society with feweropportunities find a job.

PRESENTATIONS OF STAR BRANDSThe boards of the star brands and the corporate directors were alsoinvited to regular meetings to provide an update on the development ofongoing projects. In 2014 this mainly pertained to the progress of ProjectUnited and innovation and SR initiatives.

These updates give the members of the Supervisory Board the opportunityto get an even better picture of operations and current trends in themarket, as well as the way that the USG People operating companies actand respond. It is also a good way to become acquainted with seniormanagement, to see them in action and, in doing so, to get a better idea ofthe management capacity within USG People.

RISK MANAGEMENTThe topics of risk control and risk management within USG People wererepeatedly discussed. Talks focused not only on strategic and financialrisks that were implicitly discussed in previous sections, but also on ICT-related risks, such as the continuity of outsourced operations and thesecurity of USG People’s many internet connections and other operationalrisks. The findings of internal audits and the external auditor wereincluded in this, as well as the follow-up of the ensuing recommendations,which are supervised.

PERFORMANCE AND ASSESSMENTIn the year under review the Supervisory Board discussed and assessed itsown performance and that of its individual members and the internalcommittees. The members of the Executive Board were not present at thattime. The review took place in a plenary session as well as various one-on-one sessions with the chairman of the Supervisory Board and/or chairs of

the internal committees. Furthermore, the cooperation with the ExecutiveBoard was assessed and one-on-one talks were held with the individualmembers of the Executive Board.

The topics discussed during the assessment included the contribution andinvolvement of the members of the Supervisory Board. One of theconclusions drawn from the assessments was that the members, bothindividually and together, are sufficiently critical of themselves and eachother. The cooperation within the board was pleasant and therelationships were open, both in the former composition of theSupervisory Board with Marike van Lier Lels and in the new compositionwith Willemijn Maas and Johnny Thijs. The individual memberscomplement each other, ensuring that everything can be discussed atwell-balanced meetings at which every topic can be discussed insufficient depth. The chairman of the Supervisory Board spoke with eachindividual member of the Supervisory Board about their performance andconcluded that they performed adequately, both individually and as anentity.

REPORT OF THE AUDIT COMMITTEEIn the year under review the audit committee consisted of Rinse de Jong(chairman) and Marike van Lier Lels until May 2014. From May 2014 themaximum term of Marike van Lier Lels ended and she was succeeded byJohnny Thijs. The audit committee met five times in 2014, in accordancewith the fixed schedule. The CEO, CFO, Corporate Director Corporate Audit& Risk Management and the external auditor also attended the meetings,as well as senior CFO staff members, depending on the topics discussed.One of the meetings was partly closed to assess the audit committee as awhole and the individual members. There was regular contact with theCFO between the meetings.

In 2014 the audit committee discussed the financial statements andinterim financial reports, including the applied principles of valuation andthe non-financial information, at the meetings prior to publication. Theaudit committee also discussed the internal control procedures, internalaudits and findings in detail at quarterly meetings. The committee alsodiscussed the findings of the external auditor at each meeting before thepublication of results.

The main risks with respect to the annual accounts were also discussedwith the external auditor. These included the valuation of goodwill anddeferred income tax assets, compliance with laws and regulations and themanner in which claims and legal issues were dealt with.

A large number of other topics were discussed at the meetings in 2014,including:• the 2013 financial statements, including the findings of the external

auditor and the auditor’s report;

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• the 2014 interim results and reports and control findings, with specificattention for any valuation risks and provisions;

• the internal financial quarterly reports;• the fiscal position, including questions regarding the realisation and

associated valuations;• the documents for the General Meeting of Shareholders;• the dividend proposal for 2013;• the internal audit strategy, the progress made in the audits performed

in 2014;• the adoption of the annual planning for the internal audit in 2015;• the risk management, risk analyses and identified main risks for

USG People;• the internal control procedures with regard to strategic, financial,

operational, compliance and fraud risks;• compliance with statutory and legal requirements;• legal risks, claims and associated risk control;• the 2014 audit plan of the external auditor;• the selection of a new auditing firm (with effect from the 2016 financial

year) as a result of relevant legislative amendments;• the 2015 budget;• the financing structure, liquidity and the development of balance sheet

ratios;• the ICT strategy and IT security policy;• the structure of crisis plans and business continuity;• the Corporate Delegation of Authority Scheme;• developments at the shared service centres.

Art one of the meetings the committee assessed its own performance andthat of the individual members of the audit committee, and concludedthat cooperation within the committee had been good. In the opinion ofthe committee, its contacts with the Corporate Audit & Risk Managementdepartment, the external auditor and the Executive Board have beenprofessional and constructive, particularly its frequent contacts with theCFO. The findings of the audit committee were reported to the completeSupervisory Board.

REPORT OF THE REMUNERATION AND APPOINTMENTS COMMITTEEThe remuneration and appointments committee consisted of CeesVeerman as interim chairman and Alex Mulder until 8 May 2014 whenWillemijn Maas assumed the role of chair, and the committee was alsorepresented by Alex Mulder and Cees Veerman.

The remuneration and appointments committee met five times in personin 2014; the CEO attended all the meetings. The committee held aseparate meeting with the Vice President of HR with regard to theremuneration policy. The Vice President of HR also attended severalmeetings to discuss and expand on the proposed new remuneration policy

for the Executive Board. The committee was also in regular contact withboth the CEO and the Vice President of HR outside of the meetings.

The main topics discussed at the meetings were:• the 2013 remuneration report;• the determination of variable remuneration based on the agreed

financial and non-financial short-term and long-term targets for 2013;• the determination of the new variable financial and non-financial

targets for the short-term and the long-term for 2014;• the benchmark of the relevant peer group for the determination of the

2015-2018 employment conditions for the Executive Board;• developing the 2015-2018 employment conditions for the Executive

Board;• the relationship between the long-term and short-term employment

conditions;• defining market share and innovation within the context of the new

employment conditions;• changes in the composition of the Supervisory Board and committees.

The progress made in the realisation of the Executive Board’s financialand non-financial targets was discussed at the meetings. Several changeswere made to the non-financial targets for innovation, leadership andsocially responsible business practices in order to define the objectivesmore specifically. These are the areas of attention that USG Peoplebelieves are important for its continuity and which it wants to furtherdevelop.

The remuneration of the Executive Board for 2014 was in accordance withthe remuneration policy adopted by the General Meeting of Shareholders.A detailed account of the remuneration of the members of the ExecutiveBoard can be found in the remuneration report available via theUSG People website.

In 2014 the committee also discussed the proposal for the remunerationpolicy for the Executive Board for 2015-2018. The current policy approvedby the General Meeting of Shareholders applied up to and including 2014.Scenarios for the new policy were fleshed out by the corporate HRdepartment in cooperation with an external advisor. Different aspectswere dealt with including determining the reference group, remunerationlevels in the market, the remuneration structure, current remunerationand proposed remuneration, the relationship between short-term cashremuneration and long-term share remuneration, and the focus oninnovation. Relevant decisions are incorporated into the new remunerationpolicy for the Executive Board for the 2015-2018 period which will bepresented to the General Meeting of Shareholders for adoption in 2015.

With regard to the changed composition of the Supervisory Board theboard agreed in consultation with the new members Willemijn Maas and

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Johnny Thijs that Willemijn Maas would chair the remuneration andappointments committee and Johnny Thijs would become a member ofthe audit committee.

COMPOSITION OF EXECUTIVE BOARDThe Executive Board consists of Rob Zandbergen (CEO) and LeenGeirnaerdt (CFO).

COMPOSITION OF SUPERVISORY BOARDUSG People aspires to achieve a wide and diverse composition at everylevel of the company. The appointments of Johnny Thijs and WillemijnMaas in May 2014 means that the composition of the Supervisory Boardcomplies with the diversity objectives outlined in the composition profile.Johnny Thijs holds Belgian nationality and the Supervisory Boardmembers are experienced in the political, administrative, social and/oracademic sector. Specific experience and knowledge is also presentrelated to the operations of USG People and the job market. As a result ofthe appointment of Willemijn Maas the percentage of women in the boardis 20%, which does not comply with the 30% requirement. The SupervisoryBoard took this into account when seeking the proposed new boardmembers, as well as opting for complementarity in specific areas ofexpertise and considering the suitability of the respective candidate.

The Supervisory Board aims for future appointments to ensure that thecomposition of the board meets this requirement.

The Supervisory Board possesses plenty of knowledge about the flexiblelabour market and has a financial specialist. Each member has thenecessary experience in the field of general business management andleading large, market-oriented organisations. This ensures that the boardhas sufficient knowledge and know-how to perform its supervisory taskproperly.

RESIGNATION ROTAAs from May 2014 the Supervisory Board consisted of five membersappointed according to the following resignation rota:

FIRST APPOINTMENT APPOINTED UNTIL

Cees Veerman (chairman) 2010 2016Rinse de Jong 2010 2018Alex Mulder 2006 2018Johnny Thijs 2014 2018Willemijn Maas 2014 2018

APPROVAL OF FINANCIAL STATEMENTS, DIVIDEND PROPOSAL ANDDISCHARGEAs stipulated in the Articles of Association, the Supervisory Board submitsthe financial statements as drawn up by the Executive Board to theGeneral Meeting of Shareholders for adoption. The financial statementshave been audited and received an unqualified auditor’s report byPricewaterhouseCoopers Accountants N.V. The report can be found in theonline version of the annual report which can be found on the USG Peoplewebsite. To read the report please refer to page 147 of the PDF versionavailable online.

In accordance with the dividend policy of USG People, the Executive Boardproposes to distribute a cash dividend of € 0.16 per share for the 2014financial year.

This proposal is expanded on in more detail in the profit appropriationsection. We, the Supervisory Board, support this proposal.

We propose that the General Meeting of Shareholders adopt theunchanged financial statements for 2014, approve the dividend proposal,and grant discharge to the members of the Executive Board in respect oftheir management activities as well as to the Supervisory Board in respectof its supervision of these activities.

IN CONCLUSIONThe Supervisory Board wishes to thank all employees and themanagement USG People for their contribution this past year. The passionand commitment of all was instrumental in returning to growth and manyinnovative initiatives came to fruition to aid the further development of theorganisation. This boosts our confidence in the future of USG People. Wewish every employee and manager every success and job satisfactiongoing forward.

Almere, 25 February 2015

The Supervisory Board

Cees Veerman, chairmanRinse de JongAlex MulderWillemijn MaasJohnny Thijs

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The remuneration policy that applies to the USG People Executive Board isset by the General Meeting of Shareholders for a period of several years.The shareholders approved the remuneration policy for the period from2011 to 2014 during General Meeting of Shareholders in 2011.

The Supervisory Board determines the remuneration of the individualmembers of the Executive Board based on the policy set by the GeneralMeeting of Shareholders. The remuneration policy is aimed at attractingand retaining qualified directors for the Executive Board who have thedrive and sustained commitment to add value to USG People.

MARKET-COMPATIBLE POLICYThe policy is designed to be in line with market-compatible practice asmuch as possible, taking into account the remuneration practice withinthe performance peer group. This group consists of USG People’s directcompetitors. Another reference point is a labour market reference groupconsisting of a balanced selection of shares included on the AmsterdamMidkap Index (AMX) and the Amsterdam Exchange Index (AEX). This labourmarket reference group provides a framework for determining the amount,structure and composition of the remuneration of the members of theExecutive Board.

STRUCTURE OF THE EXECUTIVE BOARD REMUNERATIONThe remuneration of the Executive Board consists of five components: afixed gross annual salary, a variable short-term cash remuneration, avariable long-term share remuneration, a pension contribution, and a carand other emoluments.

1) FIXED GROSS ANNUAL SALARYThe Supervisory Board applies a market compatible remuneration levelwithin the median and third quartile range – based on the aforementionedlabour market reference group – for the fixed annual gross salary for themembers of the Executive Board.

The fixed gross annual salaries for the period from 2011 to 2014 have beenset as follows:

POSITION FIXED GROSS ANNUAL SALARY

CEO € 625,000CFO € 400,000

The Supervisory Board retains the right to deviate from theaforementioned levels of remuneration in certain cases.

2) VARIABLE SHORT-TERM CASH REMUNERATIONThe strategic growth of USG People is measured using two financialperformance indicators, namely Earnings Before Interest, Tax andAmortisation (EBITA) as a percentage of revenue and EBITA as apercentage of the gross result. The variable short-term cash remunerationis also linked to a third financial performance indicator: average DaysSales Outstanding (DSO). Part of the variable short-term cashremuneration now depends on the results of qualitative objectives.These qualitative objectives relate to leadership and culture, sociallyresponsible business practices and innovation. The results targeted withinthese areas are set annually in light of the strategic development ofUSG People.

The variable short-term cash remuneration target is linked for up to 70%of the fixed gross annual salary to the results of financial parameters,namely EBITA as a percentage of revenue and EBITA as a percentage ofthe gross result. The variable short-term cash remuneration linked toqualitative targets is up to 30% of the fixed gross annual salary.

The spread of the threshold (D) (excluding a maximum 10% DSO discount),target (T) and maximum (M) variable short-term cash remuneration as apercentage of the fixed gross annual salary of the members of theExecutive Board is 28% (D) – 70% (T) – 100% (M).

3) VARIABLE LONG-TERM SHARE REMUNERATIONThe variable long-term share remuneration (performance shares) isconditionally granted each year based on the results of pre-set financialparameters. These are EBITA as a percentage of revenue and EBITA as apercentage of the gross result. Furthermore part of the variable long-termshare remuneration is conditionally granted each year based onqualitative targets, as well as leadership and culture, socially responsiblebusiness practice and innovation considerations.

The variable long-term share remuneration target is 70% linked tofinancial targets. These are EBITA as a percentage of revenue and EBITAas a percentage of the gross result. The remaining 30% is linked toqualitative targets.

The spread of the threshold (D), target (T) and maximum (M) number ofconditionally granted shares linked to the financial targets is 28% (D), 70%(T) and 140% (M) of the total target number of shares.

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PRINCIPLE FEATURES OF THEREMUNERATION REPORT—


A total of 30% of the total target number of shares is made available if thequalitative performance targets are met. If the results of the financialparameters fail to meet the defined threshold targets and no qualitativetargets are met whatsoever, the number of conditionally allocated sharesis nil. If the results meet the defined maximum targets (both financial andqualitative targets), the number of shares unconditionally allocated is140% (relating to the financial targets) + 30% (relating to the qualitativetargets) = 170% of the target number of shares.

Under the Unique Share Plan the number of shares to be allocatedconditionally in the four-year (2011-2014) performance period is asfollows:

MINMUM (IF THETHRESHOLD

PERFORMANCE ISNOT ACHIEVED)

TARGET (100%)NUMBER OF SHARES

IN PERFORMANCEPERIOD (4 YEARS IN

TOTAL)

MAXIMUM (170%)NUMBER OF SHARES

IN PERFORMANCEPERIOD (4 YEARS IN

TOTAL)

CEO 0 90,000 153,000CFO 1) 0 60,000 102,000

1) The target and maximum number of shares for the CFO for the entireperformance period equals 57,500 and 98,000, respectively, with effectfrom 01-01-2012. The target and maximum number of shares of the CFOwas 12,500 and 21,250 per year, respectively, up to and including31-12-2011.

The Supervisory Board reserves the right to deviate from the above targetnumber of shares per year in certain cases.

4) PENSION CONTRIBUTIONThe members of the Executive Board receive a gross pension contributionof 23% of their fixed gross annual salary.

5) CAR AND OTHER EMOLUMENTSThe members of the Executive Board have a lease car at their disposalsuitable to their position. The members of the Executive Board do notreceive a fixed allowance for representation expenses. Any business-related representation expenses are claimed and reimbursed.

SCENARIO ANALYSISThe Supervisory Board has calculated the possible outcome of the mainelements of the remuneration policy, in particular the short-term variablecash remuneration and long-term variable share-based remuneration,based on various scenarios.

APPOINTMENT POLICYThe members of the Executive Board are appointed by the SupervisoryBoard. All members of the Executive Board were reappointed for a periodof four years during the General Meeting of Shareholders in 2014.

DATE OFREAPPOINTMENT APPOINTED UNTIL

CEO Rob Zandbergen 8 May 2014 AGM 2018CFO Leen Geirnaerdt 8 May 2014 AGM 2018

NOTICE AND DISMISSAL POLICYA notice period of three months has been agreed with the members of theExecutive Board for the members of the Executive Board and six monthsfor the company. The payment upon termination of the contract ofemployment for reasons not attributable to the person will not exceed theamount of one year’s fixed gross annual salary (subject to the agreed termof notice) including pension contribution. If the maximum of one year’sfixed gross annual salary for a member of the Executive Board dismissedduring the first term of their employment is manifestly unreasonable, theperson becomes eligible for a termination payment of not more than twicetheir fixed gross annual salary, including pension contribution. If thecompany terminates the appointment and the employment contract forreasons attributable to the person, the company will not be obliged tomake any payment whatsoever.

In the event the contract of employment is terminated as a result of anacquisition of the company, resulting in a change of control, the paymentupon termination will amount to two times the fixed gross annual salary,including pension contribution, plus one-twelfth of this fixed gross annualsalary, including pension contribution, for every year of employment withUSG People. This payment upon termination will, however, not exceedthree times the fixed gross annual salary, including pension contribution.

USG People applies a termination payment policy in the event of a changeof control of the company to reward multi-year employment of membersof the Executive Board as well as to protect the position of members of theExecutive Board of the company in view of USG People’s shareholderstructure.

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REMUNERATION OF THE EXECUTIVE BOARD IN 2014In 2014 the remuneration of the individual members of the ExecutiveBoard was as follows:

FIXED GROSSANNUALSALARY

VARIABLESHORT-TERM

CASH REMUNER-ATION1)

TOTAL CASHREMUNERATION

PENSIONCONTRIBUTION

VALUE OFVARIABLE

SHARE-BASEDREMUNER-

ATION2) TOTALCAR AND OTHER

EMOLUMENTS

Rob Zandbergen2013 € 625,000 € 528,572 € 1,153,572 € 143,750 € 389,110 € 1,686,432 € 22,0002014 € 625,000 € 520,656 € 1,145,656 € 143,750 € 217,000 € 1,506,406 € 21,800

Leen Geirnaerdt2013 € 400,000 € 338,286 € 738,286 € 92,000 € 222,903 € 1,053,189 € 17,6002014 € 460,0003) € 383,203 € 843,203 € 105,800 € 32,000 € 981,003 € 17,200

1) Based on the realisation of 77% of the financial parameters, 54% of the fixed gross annual salary was achieved for the variable short-term cashremuneration. Based on the realisation of 98% of the qualitative targets, 29% of the fixed gross annual salary was achieved for the variable short-termcash remuneration.

2) Includes shares granted under the Unique Share Plan 2008-2010 and the Unique Share Plan 2011-2014, in accordance with IFRS 2. The income tax andsocial security premiums linked to the distribution of shares are paid by USG People.

3) The Supervisory Board decided to increase the fixed gross annual salary of the CFO tot € 460,000 as from 1 January 2014. The decision takes intoconsideration the fixed remuneration within the labour market reference group and the relationship between the fixed gross annual salary and that ofthe CEO. A situation in which the fixed gross annual salary of the CFO is around 75% of that of the CEO is deemed suitable in this respect.

The following tables provide a detailed account of the number of shares(conditionally) allocated to the members of the Executive Board in 2014:

PERFORMANCE PERIOD 2008-2010ROB ZANDBERGEN

CEOLEEN GEIRNAERDT

CFO

shar

es u

ncon

diti

onal

lyal

loca

ted

Number of shares unconditionally allocated 1) 30,500 1,867Date of unconditional allocation 26-05-2011 26-05-2011Number of shares sold 0 0Closing share price at unconditional allocation € 12.32 € 12.32Number of 25% retention award 2008-2010 2) 7,625 467Date of allocation of retention award 08-05-2014 08-05-2014

Closing share price at unconditional allocation € 10.95 € 10.95

1) The number of shares stated refers to the number of shares allocated to the individual members of the Executive Board for the period within the2008-2010 performance period in which they were a member of the Executive Board. No holding period applies to this unconditional allocation.

2) If the shares unconditionally allocated in 2011 for the 2008-2010 performance period were held up to and including the General Meeting ofShareholders in 2014 and if the director was still employed by the company at that time, said director was entitled to a retention award of 25% of theshares unconditionally allocated in 2011 at the time of the General Meeting of Shareholders in 2014.

governance


PERFORMANCE PERIOD 2011-2014PERFORMANCE YEAR 2014

ROB ZANDBERGENCEO

LEEN GEIRNAERDTCFO

shar

es c

ondi

tion

ally

allo

cate

d1)

Number of shares (minimum) 2) 0 0Number of shares (target) 22,500 15,000Number of shares (maximum) 38,250 25,500Number of shares allocated (result) 19,181 12,787Date of allocation 07-05-2015 07-05-2015Average closing share price in performance year € 10.48 € 10.48Number of shares allocated (previous performance years) 37,913 24,615Total number of shares allocated unconditionally 57,094 37,402Date of unconditional allocation 07-05-2015 07-05-2015Restricted until AVA 2016 AVA 2016

1) The conditional allocation of shares is accounted for in the remuneration report at the conclusion of each financial year. Shares are grantedunconditionally only if the member of the Executive Board is still employed by the company at the time the shares are unconditionally granted.

2) Number of shares if the threshold performance is not achieved.

Summary and account of the methods used to determine whether theperformance criteria for the variable short-term and long-termremuneration were met:

• Before the start of the financial year the Supervisory Board sets annualtargets with regard to the applicable performance criteria. Thefollowing performance criteria applied for 2014: EBITA as a percentageof revenue, EBITA as a percentage of the gross result and average DaysSales Outstanding (DSO). In this context minimum results are definedto set a threshold below which no variable remuneration (short-term orlong-term) is awarded. A ceiling is also set for targeted results.

• After extensive internal control at the conclusion of each financial yearthe financial results are submitted to the external auditor forinspection. In anticipation of the results being approved a provisionalestimate is made with regard to the allocation of the variable short-term and long-term remuneration;

• The decision on any allocation is taken and recorded by the SupervisoryBoard following approval of the annual results.

OPTION RIGHTSNot taking into account the existing share plan, no share options are heldby the members of the Executive Board.

LOANSNo loans, advances or related guarantees have been granted to membersof the Executive Board.

REMUNERATION OF THE EXECUTIVE BOARD IN 2015The current remuneration policy for the Executive Board was set for theperiod up to and including 2014. In 2014 the remuneration andappointments committee therefore revised the remuneration policy andproposed changes to the Supervisory Board for the 2015 - 2018 period.The proposed remuneration policy is subject to the approval of the GeneralMeeting of Shareholders on 7 May 2015. If approved, then theremuneration policy will come into force with retroactive effect as from1 January 2015. The proposed remuneration policy can be found on theUSG People corporate website.

REMUNERATION OF THE SUPERVISORY BOARD IN 2014The fixed remuneration of the chairman and members of the SupervisoryBoard is set at € 57,500 and € 42,500 per year, respectively. All membersof the internal committees receive an amount of € 7,500 per year for theirinvolvement in these committees. All members of the Supervisory Boardalso receive an annual expense allowance of € 2,000.

governance


In 2014 the individual remuneration of the members of the SupervisoryBoard was as follows:

PERIODICAL REMUNERATION (INCLUDINGEXPENSE ALLOWANCE) 2014 2013

Cees Veerman € 67,000 € 67,000Joost van Heyningen Nanninga € 18,440Rinse de Jong € 52,000 € 52,000Alex Mulder € 52,000 € 52,000Willemijn Maas 1) € 33,700Johnny Thijs 1) € 33,700Marike van Lier Lels 2) € 18,450 € 52,000

1) Ms Maas and Mr Thijs were appointed as members of the SupervisoryBoard by the General Meeting of Shareholders on 08-05-2014.

2) The term of Ms Van Lier Lels expired on 08-05-2014. Having reached themaximum term of twelve years Ms Van Lier Lels was not reappointed.

No share options are held by members of the Supervisory Board. No loans,advances or related guarantees have been granted to members of theSupervisory Board.

REMUNERATION OF THE SUPERVISORY BOARD IN 2015The Supervisory Board proposes to increase the consideration paid tomembers of the Supervisory Board for their involvement in committeesfrom € 7,500 to € 12,500 per year with effect from 2015. This proposal willbe submitted to the General Meeting of Shareholders on 7 May 2015 forapproval.

governance


governance


EXECUTIVE REPORT—


This past year the themes of diversity and inclusivity were popular topics,not in the least because of the Participation and Quota Act that wasintroduced in the Netherlands. In other countries USG People has hadexperience dealing with rules governing the employment of people with anoccupational disability for some time. Germany, for example, stipulates anemployment quota and Belgium and France also have legislation requiringcompanies to hire people with a disability. The introduction of a quota inthe Netherlands is a new development and the target is to create a total of125,000 new jobs by 2026, of which 100,000 jobs in the private sector and25,000 in the public sector.

flex worker placements in Belgium

0%

2%

6%

4%

10%

12%

8%

LONG-TERM UNEMPLOYED

AGED 57 OR OVER

2014 2013 2014 2013

We play an important role in helping people further removed from the jobmarket find a job and see that we are increasingly partnering our clients tohelp resolve social staffing issues. In 2014 we carried out a broad samplereview of the number of placements of long-term unemployed people andpeople aged 57 or over in Belgium. This review showed that 11% of the flexworkers we placed with Belgian clients in 2014 concerned long-termjobseekers in 2014. This represented a 30% rise compared to 2013. Six percent of the total number of placements concerned people aged 57 or over,an increase of 12% compared with 2013.

USG RESTARTUSG Restart, a socially-driven organisation within Start People in theNetherlands, helped more than 1,000 occupationally disabled people finda job and coached around 2,500 people at work in the Netherlands in 2014.This mainly concerns people with a mental or physical disability whowould have had little to no chance of success on the job market withoutprofessional assistance. By doing so USG Restart helps our clientsbecome more inclusive organisations. The USG Restart coaches not onlyhelp the employees with a disability in a tailor-made way but also relievethe employer of as much work as possible during the hiring and integrationprocess.

Furthermore, in times of economic hardship USG Restart actively helpspeople in work-to-work programmes. These are people who have lost theirjobs due to restructurings and who USG Restart helps find a new job bymeans of outplacement. USG Restart provides this service for variousclients in the public sector, banks, insurers and the healthcare sector.

In 2014 USG Restart launched several new initiatives to boost theemployment of young and older people. These included the GenerationScheme, a new initiative aimed at providing employees aged 62 and overwith the opportunity to work part-time, thus creating jobs for youngerjobseekers.

INTERNAL ORGANISATIONOur own objective is to also be an inclusive organisation. A good balancehas been achieved in some areas, such as the male-female ratio and thecomposition of our workforce. In recent years the percentage of women inmanagement positions has also increased further. In other areas, such asthe placement of occupationally disabled people, we aim to take furthersteps in the coming period. A plan was drafted for this purpose in 2014aimed at placing more of these people within our organisation. At the endof 2014 our organisation employed 30 occupationally disabled people.

As a specialist in the field of HR our attitude towards these themes is tofocus on the opportunities and not the restrictions. Everybody is uniqueand comes with his/her own baggage and history. We believe in the powerof these differences between people and aim to achieve an inclusiveworkplace with a climate in which everyone feels valued, involved andrecognised. We focus on all the different aspects of a person. That meansboth visible aspects, such as gender and ethnic background, and lessvisible aspects, such as working styles or character traits. That wayeveryone has the opportunity to develop their talent and we are able toprovide the best possible service to our clients and candidates.

EDUCATION AND HUMAN CAPITAL DEVELOPMENTAware of our role in society, we contribute to learning initiatives aimed attackling educational problems facing young people and, in doing so,provide a smoother transition to the job market. For instance, USG Peopleis a founding partner of Vakcollege, a Dutch educational institutionestablished by the technical education system and employers. Togetherthey aim to improve vocational education, create the best possible links tothe job market and ultimately train a new generation of skilled workerswho enter the job market with the necessary knowledge and know-how.We support the initiative, both financially and with our expertise, becausewe believe that good training opportunities are crucial for a healthy jobmarket.

Talent development and leadership are other areas of human capitaldevelopment that will receive extra attention in the coming year.

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DEVELOPMENTS IN OUR SOCIALRELEVANCE—


USG People invests in attracting and developing talents and helping themadvance within the organisation. Frontrunners, our international talentdevelopment programme for middle management, is an example of this.The leaders of tomorrow must score above average on teamwork, self-knowledge and learning agility: the ability to learn quickly in newsituations.

The themes of employee vitality, being a leader in the field of job marketdevelopment and human capital development will be expanded on in 2015.We offer our ‘Good Life’ vitality programme to all head office staff in theNetherlands to help promote healthy living in order to increase thesustainable employability of our staff.

We also want to introduce our vision of the future of the job market to awide audience and inspire. What developments are ongoing and what dothey mean in practice. We want to actively engage in dialogue with ourstakeholders about this and contribute to future-proof solutions.

All this contributes to developing and improving the link between supplyand demand on the job market.

ENVIRONMENTAL IMPACTUSG People believes it is important that our operations take place in anenvironmentally responsible way. Our core activity – connectingemployees and employers – is in itself not taxing on the naturalenvironment but we do of course use buildings, vehicles, machines andpaper in the performance of our activities, all of which had an impact onthe environment when they were being produced or used. We aim to limitthe negative impact of our activities on the natural environment. In 2011we set ourselves a target of lowering our CO2 footprint by 10% in 2015compared to 2011.

Since then we have measured the CO2 emissions of our star brands andthe shared service center in the Netherlands annually to monitor theimpact of our measures on the CO2 reduction plan. In view of our progressin reducing CO2 emissions, particularly in our car fleet, it is likely that thefigures for the Netherlands are indicative for the progress made in theother countries.

In 2011 our CO2 emissions totalled around 12,943 tonnes. This was loweredto 11,007 tonnes in 2013, a 15% drop. That meant that the 10% reductiontarget had already been realised. CO2 emissions are expected to dropfurther in 2014. At the time of publication of the annual report, however,the CO2 footprint for 2014 had not been finalised yet as the figure iscalculated retrospectively. Even though we have achieved this target westrive to lower our emissions further. In 2015 we will determine newambitions in this area.

MOBILITYOur CO2 reduction efforts are mainly focused on mobility andaccommodation. Around 85% of our emissions relate to mobility, around14% to accommodation and 1% to paper consumption.

In 2014 USG People set up a Mobility Platform within the organisation. Theplatform examines various alternatives, including a policy based onindividual mobility budgets. The starting point is an organisation-wide lookat how we can travel greener, smarter and cheaper and how we can applythis throughout the organisation.

An internal study shows that cars are by far the most used means oftransportation within our organisation. 77% of all transportation takesplace by car, most of which are lease cars. The energy consumption of ourfleet of cars is therefore a key point of attention within our organisation. Atthe end of 2014 93.9% of our Dutch and 90.0% of our Belgian car fleet hadan A label.

In addition to our ongoing focus on reducing the CO2 emissions of our cars,in 2014 we launched a pilot for the use of electric scooters and bicycles asan alternative means of transportation to cover short distances in largercities. This enables us to study whether we can adopt functional mobilityin a more focused way at branch level. As a result we may be able toreduce the number of business-related kilometres driven.

ENERGY CONSUMPTION AT BUILDINGSAs from 1 January 2011 our Dutch offices have been purchasing greenenergy. In 2014 we expanded our green energy consumption to ourGerman network and our entire organisation in the country switched togreen energy in the course of the year.

In 2014 a great deal of attention was also focused on the restructuring ofour branch network which involved moving out of mainly smaller retaillocations, clustering branches and moving them mainly to office locations.We are also witnessing the impact of this in a further reduction of CO2

emissions due to the better quality of building systems and other factors.An energy policy plan will be drafted for 2015 that will focus on thecombination of monitoring and influencing energy consumption.Consumption targets will be leading in this respect.

The reduction in waste flows was not really expanded on in 2014: our ownprocess is under control whereas the desired effect appears to be laggingwith our suppliers. However, talks are ongoing with various parties toachieve a clear improvement in 2015. A similar approach to energy (with apolicy plan and specific targets) will be adopted for waste flows.

Also, in 2015 the focus will more than ever be on striking a balancebetween the location of the branch and mobility. When selecting new or

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different locations the impact on mobility will also be examined in anintegrated way. And we will continue to look further into how marketparties can help us in the area of integrated workplace concepts: conceptsinvolving renting locations including furnishings and services. Suchconcepts are expected to be able to reduce CO2 emissions further.

START PEOPLE AND UNIQUE IN THE NETHERLANDS ARE CLIMATENEUTRALStart People and Unique in the Netherlands have been climate-neutralcompanies since 1 September 2012. The branches and clients are locatedthroughout the Netherlands, requiring a considerable amount oftransportation and CO2 emissions. Every year we establish the CO2

footprints of Start People, Unique and USG People in the Netherlands.Since September 2012 the remaining CO2 emissions have beencompensated by investments in sustainable energy projects in Ugandaand Kenya. The reduction in CO2 emissions ensuing from these projectsresults in the issuance of CO2 credits. By purchasing these creditsUSG People is able to finance these projects. This investment also ensuresthat families in developing countries get more time to develop, childrencan go to school and parents can spend their time earning money. Fromthat perspective this project is also in keeping with USG People’s objectiveof developing talent.

In addition Start People in the Netherlands offers clients the opportunityto hire ‘green’ flex workers. In doing so our clients can take responsibilityfor the CO2 emissions of the flex workers at their place of work. This is alsoan innovative way to make our clients aware of the environmental impactof employees and to meet their wish of promoting sustainableprocurement and reducing their own CO2 footprint. In 2013 we placed 350green flex workers. That number rose to 379 in 2014.

Certificates have been issued for both the climate-neutral company andthe green flex worker. All important processes were assessed and auditedby an independent party.

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Being an HR services provider means that we are at the heart of societyand every day we do our best to make the labour market more efficient,both under the current market conditions and with an eye to the future.Business confidence in Europe started edging up again in 2014 afterseveral years of weakness. This was preceded by a big upswing inoptimism globally. Business confidence is a major indicator of futureeconomic development. Although confidence weakened again somewhatin the final months of the year due to fresh uncertainties includingconcerns regarding the future of the Eurozone, the slowdown of growth inChina, the sharp drop in the oil price and the tensions in Ukraine and theMiddle East, businesses were still positive about their growth potential.However, the current uncertainty means that companies are delayingdecisions on investments to fuel the future growth of their organisation.Naturally this also has implications for the hiring of staff and thedevelopment of employment. Under such circumstances USG People asan HR partner was able to provide a great deal of added value by deployingflexible solutions.

Consequently the past few years have seen a clear increase in employerdemand for flexibility in their staffing organisation. By using flexible staffthey are able to respond to business opportunities that come along, inspite of the uncertainties. For jobseekers it provides a bridge to the labourmarket, particularly in times of economic uncertainty.

We offer many solutions to connect employers and employees. This allowsus to help our clients to meet their staffing needs under all economiccircumstances so that both they and the employees can continue todevelop, regardless of the economic climate. In addition as an HRspecialist we are closely involved in the developments in the labourmarket. We constantly invest in developing new solutions and also initiatediscussions with stakeholders about the trends in the market. In thiscontext USG People organised labour market debates in the Netherlandsin 2014, featuring discussions by leading representatives of various labourmarket parties about the current issues in the labour market as well astheir future expectations and trends. Based on these trends in 2014 wepublished an inspiration paper on the future of the employment market.

Through these initiatives we want to contribute to the public debate on thedevelopment of the employment market. We share our views as an HRservices provider and connect parties in order to engage in dialogue andcome up with ideas for improving the employment market and devisetailor-made solutions that match the wishes and needs of the market.

We see that our role in the job market is ever evolving. Not only do we findthe best candidates for our clients but we increasingly match candidate’sbased on their talents and motivation and provide meeting opportunitiesand knowledge networks. This enables us to connect our candidates to ourclients at a different level. With regard to our clients, as well as giving

them access to a flexible organisation we increasingly offer knowledge inthe field of the broad HR services provider and act as a strategic partner interms of HR solutions and applications. This also allows us to connect ourexperience and knowledge at various levels within the broad employmentmarket.

OUR DISTRIBUTION NETWORKSTAR BRAND OFFICES

NUMBER OF BRANCHES 2014 2013 20122014

DECLINE2013

DECLINE

General Staffing 420 423 530 -3 -107Specialist Staffing 312 336 383 -24 -47Professionals 31 38 40 -7 -2USG People 763 797 953 -34 -156

In-house locations 150 135 138Physical branches 613 662 815 -49 -153

number of star brand branches

400

500

600

700

800

900

2014 2013 2012

The functionality of the branches has changed over the course of theyears, with the traditional office premises on a busy shopping street withvacancies posted in the window having made way for modern and muchlarger meeting and knowledge centres at accessible locations. The branchfunction changed with the rise of the internet and mobile networks. Thesedays it is rare for a candidate looking for a job to apply through a physicalbranch. Our distribution model has been adapted accordingly, resulting ina progressive decline in the number of branches.

Forty-nine branches closed in 2014. The decline was greatest at Unique inthe Netherlands as a result of the merger of Creyf’s and Technicum withUnique.

At end-2014 our physical network consisted of 613 branches and 150 in-house locations. The number of physical branches fell by 7.4% comparedto a year earlier (end-2013: 662 branches). Conversely, the number of in-

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DEVELOPMENTS IN OUR MARKET—


house locations rose to 150, up 15 in 2014. In-house locations nowaccount for one-fifth of our total number of sites.

In the coming years the number of branches will continue to decline. Thiswill not affect the geographical range of our activities. The functionality ofthe branches is geared to the current needs of clients and candidates.

SHARED SERVICE CENTERSIn all the core countries USG People uses shared service centers forinternal support services and back office activities. These shared servicecenters are an efficient way of providing high-quality, knowledge-intensivesupport to the field operation. This is achieved through ongoingdevelopment and improvement, and by using lean processes and sharingbest practices. The shared service centers operate like a well-oiledmachine in the background and the quality of their support makes a majorcontribution to the commercial success of our star brands. In 2014satisfaction with the services provided to the operating companiesshowed further improvement across the board, reaching a high level. Thissatisfaction is measured annually as is the working environment at theshared service centers themselves. In 2014 we organised events foremployees of both the shared service centers and the star brands in orderto provide inspiration and boost their involvement and collaboration.

In 2014 the link between the shared service centers, ICT services and thestar brands was intensified. The purpose of this was to maximise end-to-end thinking and optimise processes, in the sense of quality improvementas well as cost reduction and risk management. In Belgium the decisionwas taken in this context to pool the resources of transaction services andICT services. This will enable the operating companies to act more quicklyand efficiently and will translate into more agile provision of services toour clients. The back office will thus be able to provide the star brandswith even better and faster support in realising their strategy. Followingthe completion of a merger of the shared service centers in Germany in2013, in 2014 all the operating companies had access to a singlecentralised shared service center in Munich. This further increased thelevel of automation and knowledge of the workforce, which in turnresulted in a further improvement in quality, cost levels and risk control.The operating costs of the shared service centers fell in all countries in2014 compared to 2013.

In addition to the improvements we have realised in terms of quality andefficiency we have also taken risk control within our organisation to ahigher level. The internal control framework and tax control framework wehave applied support a sound risk management policy .

In 2014 we also fleshed out the sustainability policy for our branches andhead offices. Procurement of green energy was expanded further: inaddition to the green electricity already purchased for the head office and

the entire branch network in the Netherlands, the whole of USG People inGermany has now also made a full switch to green energy. In an earlierdevelopment the procurement of office supplies had already been lifted toover 90% sustainable.

OUR TECHNOLOGYTechnology is increasingly key to the development of our organisation andthe services we provide. In light of this we invest on an ongoing basis indeveloping technological applications in our business processes and inthe services we provide to our clients and candidates. In 2014 manydevelopments were focused on bringing our business processes onlineand on automating process chains. In addition there were projects aimedat simplifying and consolidating the application landscape, and renewingour front office systems. Other major spearheads included enhancing end-user performance and evolving towards a paperless company. All this withan ever greater focus on data security.

With the acquisition of interests in online service providers Netwerven,Blue Carpet and Connecting-Expertise in 2014 we took the next steps inthe development of our range of online services. The proven technologyapplied by these companies is scalable at low incremental cost and canbe applied by our star brands to their existing networks. This makes iteasy for the star brands to offer their clients new services and at the sametime the cross-pollination speeds up the process of digitising ourtraditional business.

executive report


FINANCIAL DEVELOPMENTSindexed results

60

80

100

120

140

EXPENSES REVENUE EBITA

2014 2013 2014 2013 2014 2013

In 2014 we achieved a rise in revenue and a further reduction in costs,resulting in strongly positive operational leverage. EBITA rose by 30.4% onrevenue that was 4.5% higher. As a result the underlying EBITA marginrose to 3.7% from 3.0% in 2013. There was a positive development inresults across the board in 2014.

REVENUEUSG People generated revenue of € 2,355.0 million in 2014, up by€ 100.7 million or 4.5% on the previous year (2013: € 2,254.3 million).Acquisitions had a slight positive impact of 0.1% (€ 3.2 million) on this.USG People outpaced the 2.2% growth in the market in the four countriescombined, meaning that our market share increased. This increase ismainly attributable to the outperformance of Start People in France andBelgium, and Unique in the Netherlands.

Our efforts in 2014 in the area of operational and commercial excellenceresulted in more stable client relationships and growth in revenue perclient. The client portfolio was more stable in 2014 and revenue per clientincreased by more than 10% compared to 2013. This is consistent with oursales strategy to become more of a partner to our clients, with a great dealof attention being paid to a close and lasting client relationship.

These positive developments were borne out by the results of our clientsatisfaction surveys. The clear choices we have made in our sales strategyin terms of the quality of the services we provide and the strengthening ofour client relationships are producing results. Our priorities are to deliverquality and develop our services. In close consultation with our clients we

CONSOLIDATED RESULTS REPORTED ► NON-RECURRING ► 1) UNDERLYING(in millions of euros) 2014 20132) 2014 2013 2014 2013 '14/'13

Revenue 2,355.0 2,254.3 - - 2,355.0 2,254.3 4.5%Gross result 492.1 483.6 - 2.6 492.1 486.1 1.2%Operating expenses 399.4 440.2 -8.8 -36.6 390.6 403.6 -3.2%Depreciation 19.2 18.9 -4.4 -2.9 14.8 16.0 -7.6%EBITA 73.5 24.5 13.2 42.1 86.7 66.5 30.4%

Amortisation 3) 6.4 14.2 - -0.7 6.4 13.5 -52.6%EBIT (operating result) 67.1 10.2 13.2 42.8 80.3 53.0 51.5%Financial results -9.5 -9.6 2.3 -5.9 -7.2 -15.5 -53.5%Income tax expense -29.5 -18.9 8.8 2.4 -20.7 -16.5 25.5%Discontinued activities 4) -1.7 -7.8 1.7 7.8 - - -Minority interests -0.5 - - - -0.5 - -NET RESULT 25.9 -26.1 26.0 47.1 51.9 21.0 147.1%

Gross margin 20.9% 21.5% 20.9% 21.6%EBITA margin 3.1% 1.1% 3.7% 3.0%

1) Non-recurring costs relate to one-off costs and costs associated with the rollout of Secretary Plus and USG Professionals.2) The results shown for 2013 are pro forma results based on the results of continuing operations, excluding the results of the activities divested in 2013

(USG Energy and the General Staffing activities in Spain, Italy, Austria, Switzerland, Poland and Luxembourg).3) Amortisation concerns the depreciation of acquisition-related intangible assets, including goodwill.4) The result from discontinued activities includes the net operating result of USG Energy.

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DEVELOPMENT OF FINANCIALRESULTS—


are in constant search of the right solutions to further develop the addedvalue of our services.

revenue composition blue collar - white collar

0%

25%

50%

75%

100%

USG PEOPLE NETHERLANDS BELGIUM FRANCE GERMANY

blue collar white collar

Generally speaking the sectors with the strongest revenue growth in 2014were industry, transport and logistics and technology, particularly at largeindustrial companies that were able to benefit from the growth in exports.In the latter half of the year there was also a recovery in demand fromsmall and medium-sized businesses (SME). As a result for the first time inyears we saw a slight increase in revenue in the SME segment relative toour large clients. Large clients accounted for 70% of group revenue in 2014and SMEs for the remaining 30%.

REVENUE BY COUNTRY(in millions of euros) 2014 2013 GROWTH

The Netherlands 1,011.7 976.3 3.6%Belgium 624.3 584.9 6.7%France 485.9 464.3 4.7%Germany 225.2 221.6 1.6%Other countries 7.9 7.2 9.7%USG People 2,355.0 2,254.3 4.5%

NetherlandsBelgiumFranceGermanyother countries

All countries achieved an increase in revenue in 2014. Among the corecountries growth was strongest in Belgium, where revenue rose by 6.7% to€ 624.3 million (2013: € 584.9 million). Start People posted growth of

10.2% in Belgium, outpacing market growth of 7.7%. Unique, whichrecovers somewhat later in the cycle, posted growth of 4.9%, with growthpicking up in the course of the year from a negative 0.4% in the firstquarter to 9.0% in the last quarter. Unique focuses more on the officesegment, where growth in 2014 remained somewhat lower than in theindustrial segment. Demand in the medical segment also remained weak.At Secretary Plus and USG Professionals revenue for the year as a wholewas lower than in the previous year, although both star brands saw apositive development in the course of the year with USG Professionalsreturning to growth in the final months.

In France Start People saw revenue grow by 4.7% to € 485.9 million (2013:€ 464.3 million) against a background of no market growth. Ourcommercial focus helped us outperform the market in 16 of the 20regions. Growth was strongest in transport and logistics and in the foodindustry. Five new branches were opened in France in 2014 in order toexpand in the nuclear sector as well as provide services to existing clients.

In the Netherlands revenue rose 3.6% in 2014 to € 1,011.7 million (2013:€ 976.3 million). With strong growth of 11.8% Unique performed far betterthan the market, which saw growth of 6.5% in 2014. The office segment inparticular turned in an exceptionally good performance in 2014. In thelatter half of the year Unique once again saw the share of the SMEsegment in its revenue increase relative to that of large clients.Growth at Start People lagged somewhat behind the market in 2014,mainly as a result of the phasing out of several large-volume contracts inthe second half of the year. Aside from these contracts robust growth wasrealised at clients in industry and the logistics sector as well as theservices and public sector. In addition several new large contracts werewon which will start generating revenue in 2015. An increased need forextra capacity at companies was also confirmed by a noticeably strongdemand for students during the summer period.Secretary Plus experienced a positive development during 2014. Althoughthere was still a drop in revenue for the year as a whole September saw areturn to growth. At USG Professionals revenue was virtually unchangedfrom the previous year. There was strong growth in legal and marketing,communication & sales, whilst engineering and finance continued to lag.

In Germany revenue was up 1.6% at € 225.2 million (2013: € 221.6 million);this growth was in line with the market. In 2014 many flex workers wereoffered permanent contracts by companies as a result of the shortage onthe German labour market and the introduction of equal pay. In additionthere was pressure from the trade unions to reduce the number of flexibleemployment contracts. This resulted in slower growth, for the technicalprofiles in particular. One of the targets of the Unique sales strategy isrevenue growth in the administrative segment. In 2014 this alreadyresulted in expansion of this segment relative to the industrial andtechnical segments. Secretary Plus saw revenue decline by 11.8%

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compared to 2013. Following a gradual improvement in the course of theyear the final quarter saw a turnaround to growth.

revenue by segment

(in millions of euros) 2014 2013 GROWTH

General Staffing 1,407.4 1,354.0 3.9%Specialist Staffing 792.8 749.1 5.8%Professionals 147.7 148.6 -0.6%Online Business Solutions 7.1 2.6 173.1%TOTAL 2,355.0 2,254.3 4.5%

General Staffing Specialist Staffing Professionals Online Business Solutions

From the perspective of the star brands growth was strongest atSpecialist Staffing. This segment, consisting of the Unique andSecretary Plus star brands, posted growth of 5.8% to € 792.8 million(2013: € 749.1 million). Growth was especially strong at Unique,particularly in the Netherlands and Belgium. Secretary Plus posted adecline in revenue compared to the previous year, although there was aclear upward trend in the course of the year. In the last quarter revenueapproached a return to growth compared to the year before.

General Staffing, consisting of Start People in the Netherlands, Belgiumand France, posted a growth in revenue of 3.9% to € 1,407.4 million (2013:€ 1,354.0 million). In Belgium and France Start People performedsubstantially better than the market, resulting in an increased marketshare in these countries. In the Netherlands Start People’s growth failedto match the market due to the termination of several large-volumecontracts, which from 2015 will be compensated for by newly concludedcontracts.

Revenue in the Professionals segment was virtually unchanged comparedto the previous year. On balance there was a slight revenue decline of0.6% to € 147.7 million (2013: € 148.6 million). Legal and marketing,communication & sales performed well in this higher skilled segment,whilst engineering and finance lagged somewhat.

Online Business Solutions (OBS) posted strong growth in 2014, bothorganically and through acquisitions. Growth including acquisitions

equalled 173.1% with organic growth totalling 51.9%. OBS comprises thecompanies Adver-Online, Netwerven and Connecting-Expertise. In thecourse of the year 51% stakes were acquired in Netwerven andConnecting-Expertise.

GROSS RESULTThe gross result rose to € 492.1 million in 2014 from an underlying grossresult of € 486.1 million in 2013. As a percentage of revenue the grossmargin equalled 20.9% in 2014, down 0.7 percentage point on 2013(21.6%).

The gross margin level declined in 2014 as a result of mix and price effectsas well as a one-off tax refund in 2013. Revenue from recruitment andselection (4.6% of the total gross margin) grew by 4.0% compared to 2013.This was in line with the growth of other revenue, meaning that there wasno mix effect on the gross margin level. As a percentage of total revenuerecruitment and selection was unchanged from the previous year at 1.0%.The decline in revenue at our call centre activities, which record a 100%gross margin, had a 0.2% negative impact on the group margin.Furthermore Secretary Plus and USG Professionals still saw a year-on-year revenue decline. Because of the high added value of the services theyprovide these star brands generate a relatively high gross margin, whichmeans that lower growth at these brands has a negative mix effect on thegroup margin.

In addition to the mix effects there were also price effects, both positiveand negative. There was pressure on prices for many large tenders andthere was increased demand for cost-efficient solutions with a low grossmargin, such as in-house and payrolling concepts.

In France there was a positive effect from an increased reduction in wagetax costs, the CICE tax credit scheme introduced at the end of 2012 as ameans of stimulating the economy. The scheme reduces the wage costsfor those employees on salaries of up to 2.5 times the minimum wage. Thepositive impact of this increase on the group margin compared to 2013was 0.2%.

On balance the mix and price effects had a negative impact of 0.5% on thegross margin in 2014.

In the Netherlands there was a one-off tax refund in 2013, which had apositive impact of 0.2% on the gross margin in that year. Given that therewas no refund in the year under review the negative impact compared tothe previous year equals 0.2%.

In 2013 in addition to the underlying gross result the cost price included anon-recurring charge of € 2.6 million in connection with the creation of areserve for own risk bearer status for sickness benefits.

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OPERATING EXPENSESUnderlying operating costs including depreciation fell in 2014 to€ 405.4 million (2013: € 419.6 million). This means that costs fell by 3.4%(€ 14.2 million) while revenue rose by 4.5%. The further reduction in costswas largely the result of the implementation of project United, whichinvolved the grouping of brands into the four star brands. Acquisitionsresulted in a small increase in costs of € 1.4 million.

Underlying costs as a percentage of revenue (including depreciation)improved to 17.2% in 2014 (2013: 18.6%). Excluding USG Restart andCall-IT, which apply a business model characterised by a low direct costprice and a higher operating cost base, the cost level was 16.2%.

In addition to underlying costs there were non-recurring costs equalling€ 13.2 million in 2014. These costs were generally related to organisationalimprovement programmes, the execution of project United, networkoptimisation at USG Professionals and ongoing improvement programmesat the Share Service Centers. In 2013 non-recurring costs amounted to€ 39.5 million.

Operating expenses including the aforementioned non-recurring costs fellby 8.8 % to € 418.6 million (2013: € 459.1 million).

EBITA

(underlying results)

EBITA IN MILLIONS OFEUROS EBITA MARGIN

2014 2013 GROWTH 2014 2013

General Staffing 60.2 52.9 13.8% 4.3% 3.9%Specialist Staffing 39.6 33.3 18.9% 5.0% 4.4%Professionals 2.4 3.1 -22.6% 1.6% 2.1%Online Business Solutions 1.4 0.0 - 19.7% 0.0%Corporate -16.9 -22.8 25.9%USG People 86.7 66.5 30.4% 3.7% 3.0%

Underlying EBITA rose by 30.4% to € 86.7 million (2013: € 66.5 million). The4.5% growth in revenue along with the reduction in costs resulted in anincrease in the EBITA margin to 3.7% (2013: 3.0%). At the star brandsprofitability improved in the Staffing segments, with the EBITA marginhigher at both General Staffing and Specialist Staffing. Professionalsposted a drop in the EBITA margin, mainly as a result of the operatingcosts of the activities rolled out. In 2013 these start-up costs were largelyrecognised as non-underlying. Online Business Solutions achieved anEBITA margin of 19.7%. The profit margin on these new activities is muchhigher than that achieved on the traditional activities of the star brands.

Including non-recurring results EBITA equalled € 73.5 million in 2014compared to € 24.5 million in 2013.

AMORTISATION OF ACQUISITION-RELATED INTANGIBLE ASSETSUnderlying amortisation of acquisition-related intangible assets droppedto € 6.4 million in 2014 (2013: € 13.5 million). In the past few years thebook value of acquisition-related intangible assets has fallen due todepreciation and impairments, resulting in a considerable decline inannual amortisation of these assets.

Reported amortisation in 2013 included an amount of € 0.7 million foraccelerated depreciation.

FINANCIAL RESULT(in millions of euros) 2014 2013

Underlying financing result -7.2 -15.5Unrealised value adjustments to derivatives - 6.2Revaluation of earn-outs -2.3 0.5Accelerated amortisation of finance expenses - -0.8Financial result -9.5 -9.6

The underlying financial result improved to € -7.2 million in 2014 from€ -15.5 million in 2013. Interest expenses fell, primarily due to thematuring of interest rate derivatives in July 2013, with expenses of€ 6.3 million having been incurred on these in the previous year. Theunderlying financial expenses related mainly to interest on loans andcommitment fees for available credit facilities. In addition to theunderlying expenses an expense of € 2.3 million was recognised in thereported financial result for the revaluation of previously valued earn-outsfor acquisitions.

The reported financial result for 2014 was € -9.5 million against€ -9.6 million in 2013.

INCOME TAX EXPENSE(in millions of euros) 2014

Underlying income tax expense 20.7Additional unrecognised losses 14.5Unrecognised temporary differences 2.0Prior-year taxes -0.6Offset of tax loss at associate -4.2Tax on non-recurring results -2.9USG People 29.5

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Underlying income tax for 2014 was € -20.7 million (2013: € -16.5 million).Reported income tax was higher as a result of impairments on deferredincome tax assets relating to recognised losses and temporarydifferences. This impairment equalled € -16.5 million. There were alsosome positive effects as a result of prior-year taxes and the deduction of atax loss at an associate. Excluding these effects the income tax rate was28.3%.

Reported income tax for 2013 included an amount of on balance€ 2.4 million in non-underlying tax.

NET INCOME ATTRIBUTABLE TO EQUITY OWNERS OF THE COMPANYUnderlying net income rose to € 51.9 million from € 21.0 million in 2013. Inboth 2014 and 2013 reported results were impacted by non-recurringeffects.

Including non-recurring results net income rose to € 25.9 million in 2014from € -26.1 million in 2013.

CASH FLOWCONDENSED CASH FLOWSTATEMENT(in millions of euros) 2014 2013 DIFFERENCE

Operating cash flow 71.1 23.4 47.7Investments -20.0 -17.8 -2.2Free cash flow 51.1 5.6 45.5

Acquisitions and divestments -7.8 77.2 -85.0Interest expenses paid -7.9 -12.7 4.8Dividend paid -6.3 -5.0 -1.3Net cash flow from discontinuedactivities 1.0 -1.0

The operating cash flow rose by € 47.7 million to € 71.1 million (2013:€ 23.4 million). Operating cash flow rose due to the higher result and adrop in working capital. In addition the offset of prior-year tax lossescarried forward lowered the income tax expense.

Investments were slightly up on last year and equalled € 20.0 million(2013: € 17.8 million). Following a period of transition at the organisation in2013 there were no further divestments in 2014. An amount of € 7.8 millionwas invested in the acquisition of stakes in providers of online businesssolutions in 2014.

Interest expenses paid were down, mainly as result of lower costs oninterest rate derivatives which matured in July 2013. In addition an

amount of € 6.3 million was distributed in cash dividends (2013:€ 5.0 million).

BALANCE SHEETCONDENSED BALANCE SHEET(in millions of euros) 2014 2013 DIFFERENCE

Fixed assets 810.0 781.4 28.6Income tax assets and liabilities 22.2 46.7 -24.5Working capital -130.5 -116.1 -14.4Shareholders’ equity 478.9 459.6 19.3Subordinated borrowings 58.7 58.1 0.6Net debt to financial institutions 91.0 119.8 -28.8Other financial debt 7.7 0 7.7Derivative financial instruments 0.6 0 0.6Provisions 64.8 74.4 -9.6Balance sheet total 1,221.2 1,189.6 31.6

In 2014 the balance sheet total rose by € 31.6 million to € 1,221.2 million(2013: € 1,189.6 million). The increase was mainly due to a rise in loansand advances to the French government. A loan to the French government,which is required by law for businesses in France, increased by€ 4.6 million to € 15.6 million, while the amount receivable in connectionwith the reduction in employer's costs (CICE) increased by € 18.5 million to€ 31.6 million.

Working capital fell by € 14.4 million to € -130.5 million in 2014. Theamount outstanding in trade and other receivables increased by 5.2%while trade and other payables rose by 7.3%. Outstanding tradereceivables sold (factoring) increased by € 3.0 million. At end-2014outstanding trade receivables totalling € 124.1 million had been sold(2013: € 121.1 million). Including outstanding receivables sold workingcapital would amount to € -6.4 million (2013: € 5.0 million).

Shareholders’ equity rose by € 19.3 million in 2014 to € 478.9 million (2013:€ 459.6 million). The increase was almost exclusively due to the addition ofcomprehensive income of € 25.9 million minus the cash dividenddistribution of € 6.3 million in 2014.

There was a further reduction in net debt in 2014, down € 28.2 million to€ 149.7 million (2013: € 177.9 million).

Other financial debt increased by € 7.7 million as a result of theacquisitions made in 2014. This relates to agreed earn-out fees recognisedat current expectations for the earn-outs payable to minority shareholdersin the event of a full takeover.

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On balance income tax assets and liabilities fell by € 24.5 million due tothe offset of losses and impairments of income tax assets. In additionprovisions fell by on balance € 9.6 million. In 2014 amounts were bothadded to and withdrawn from provisions, mainly in connection withchanges to the organisation.

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CLIENT SATISFACTIONSatisfied clients and candidates form the basis for the successfuldevelopment of our star brands. In view of this we regularly conduct clientsatisfaction surveys. The most recent surveys held by the star brandsrevealed that overall our clients highly value the services provided by ourstar brands. The professionalism of our staff, the quality of theintermediaries and the proactivity towards requests were given verypositive ratings, with the good rapport and communication with thecontacts at our star brands also rated highly. We also scored well foraccessibility, availability and adhering to agreements.

Applying innovative ideas and providing information on market trends anddevelopments enable our star brands to distinguish themselves fromother players. Close collaboration provides the opportunity for creatinggenuine partnerships and ‘clients for life’.

geograhic spread of clients

NetherlandsBelgiumFranceGermanyother countries

At end-2014 our organisation catered to 14,800 clients, mainly in the fourcore countries. On the client side there was mainly increased demand forefficient flexible solutions, including in-house solutions, payrolling andoutsourcing. The positive trend in the demand for sustainable solutions,which for example combine the development and training of flex workerswith a flexible job, also continued. Furthermore 2014 saw a positivedevelopment in the number of permanent placements.

The number of clients remained virtually stable compared to last yearwhilst the number of employees we placed with each client increased.Initially the increase pertained mainly to our large corporate clients withbusinesses in the small and medium-sized segment (SME) only starting topick up in the second half of the year. As a result we were also able to findan assignment or job for more people in this labour market segment,which has the highest relative number of jobs. Our organisation has longbeen strongly represented in the SME segment, where we are able toprovide much added value with our specialist personnel-related expertise.In addition to finding and connecting the right talent to the rightassignment we also increasingly act as an adviser, for example on issuessurrounding the increasingly complex employment legislation andregulations.

DISTRIBUTION ACROSS SECTORS

agriculture, forestry, fishing, miningconstructionmanufacturingtransportationelectric, gas, sanitary servicecommunicationswholesale traderetail tradefinance, insurance, real estateservicespublic administration

0%

20%

40%

60%

80%

100%

NETHERLANDS BELGIUM FRANCE GERMANYUSG PEOPLE

Our services contribute across almost the whole breadth of the labourmarket and our client network is broadly spread across a wide range ofsectors. An effective spread of clients and sectors is important in order tobe able to present candidates with an attractive spectrum of employersand to mitigate the impact of cyclical movements in certain sectors. Thenetwork has the widest spread in the Netherlands and Belgium, where wecan also access the public sector with our services; in France andGermany the level of penetration of flexible working in the public sector isstill virtually zero. At group level manufacturing is the largest sector,accounting for 33% of total group revenue, followed by services (15%) andthe transportation sector (12%). In 2014 our services grew most in themanufacturing, transportation and services sectors.

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DEVELOPMENTS FOR OUR CLIENTS—


In 2014 our star brands – Start People, Unique, Secretary Plus andUSG Professionals – were able to focus properly on their connective role inthe labour market. Through our star brands an average of over 95,000workers a day are employed by on average around 15,000 differentemployers in virtually every sector of the economy, a 10.8% increase inworkers compared to 2013.

NUMBER OF FLEX WORKERS 2014 2013

Start People 69,450 61,302Unique 24,235 22,805Secretary Plus 1,075 1,156USG Professionals 1,802 1,875USG People 96,563 87,139

The number of training courses for flex workers also rose sharply. Anincreasing number of clients have started procuring courses throughUSG People, for example through HROffice, the online platform welaunched in 2013. By using online portals we have made training coursesmore accessible. The number of registrations for training courses throughUSG People rose by 20% in 2014.

In 2014 our organisation as a whole spent the following amounts on flexworker training and development:

TRAINING COURSES FOR FLEX WORKERS 2014

Total investment in training courses by USG People € 9.3 millonInvestment in training courses per FTE € 160

SAFETYThe health and safety of our employees is a major and essential asset andso we pay a great deal of attention to compliance with safety instructions.Safety holds an important place both in the selection of candidates andduring the induction at the client, with attention being paid to thefollowing aspects:• Provision of safety shoes and work clothes where appropriate• Issuing and/or going over the health and safety checklist• A briefing on the health and safety instructions: practical information

about the risks associated with the specific workplace of the flexworker

• Information on house rules and safety rules and where necessarysigning of these

• Signing of the health declaration

This system ensures that the flex workers know exactly what is expectedof them before they start work. This avoids unwanted premature attritionand helps minimise accidents.

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DEVELOPMENTS FOR OURFLEX WORKERS—


As an HR services provider the satisfaction and involvement of our ownemployees is very important to us. These aspects are measured each yearin collaboration with Great Place to Work (GPTW) and in 2014 we alsoconducted a broad survey, measuring the satisfaction and involvement ofour employees in relation to numerous aspects in order to give us a broadinsight into the developments within our organisation. The findings of theannual survey are used as a basis for further development andenhancement across the organisation.

EMPLOYEE SATISFACTION (on a 10-point scale) 1) 2014 2013

Employee satisfaction score 7.0 6.6Employee involvement 7.3 6.9Participation rate 72% 65%

1) Source: Great Place to Work survey

In 2014 five of our Dutch operating companies – Creyf’s (Unique),Secretary Plus, USG Marketing, Communication & Sales Professionals,USG Legal Professionals and USG Finance Professionals – weredesignated as ‘Best Workplaces’.

At end-2014 there were 5,985 employees working for our organisation, up115 on a year earlier. Acquisitions added 70 employees to the workforce in2014. All new employees followed our on-boarding programme, which asof 2014 is fully web-based. The programme is an effective way ofacquainting our new employees with matters such as the mission, vision,strategy, ambitions, values and culture of USG People and its star brands,as well as with what our organisation expects from individual employeesin their jobs.

HUMAN CAPITAL DEVELOPMENTIn 2014 we took a number of steps in our personnel managementdevelopment, with performance management being standardised withinthe organisation and the appraisal process being made available online. In2014 this online method was introduced for middle and seniormanagement appraisals and from 2015 it will be used to appraise allemployees within the organisation. The appraisal process includes 360°feedback and evaluates both the performance and the potential ofemployees – our human capital. This gives us handles for targeteddevelopment needs and more insight into succession issues. The rightidentification and development of our employees encourages andoptimises internal promotion and supports effective progression withinthe organisation. This is the core of the services we provide, getting theright talent in the right place, and we also use it to constantly keepdeveloping our own human capital to enable us to achieve our corporateobjectives as effectively as possible.

Personal development of our employees and succession managementwithin our organisation are structural items on our agenda. In 2014 weachieved a significant improvement in internal progression, with 67% ofthe vacancies for senior management positions within our organisationbeing filled internally (2013: 44%).

2014 2013

Internal filling of senior management vacancies 67% 44%

We invest in the development of our employees, in the interests ofcontinued ongoing development of our human capital and in order toencourage the broad and long-term deployment of staff.

In 2014 we selected a number of ‘frontrunners’ from among the middlemanagement of our organisation, talented employees with an ambition forpersonal development and the potential to grow. During the year underreview this group followed a management development programme atVlerick Business School which prepared them for the next step in theircareer, be that within or outside our organisation. In addition initiatives tosupport the identification and development of talent were undertaken atthe star brands at various levels of the organisation. These included talentscouting and the provision of training and education. In 2014 we invested atotal of € 2 million in training courses for our own employees.

COURSES FOR EMPLOYEES 2014

Total investment in courses € 2.0 millionInvestment in courses per FTE € 409Investment as a percentage of wage expenses 1.0%

In 2015 we will continue to invest in employee development. In the comingyears we want to further increase our focus on the broad and long-termemployability of our staff, with specific attention across the board for thetraining and development potential of all our employees.

VITALITY AS A COMPETENCYWe live in a world where flexibility is key. Flexibility in terms of knowledge,competencies and employees. Flexibility in how we organise work and putit into practice. Technology has made time and place independent workingnormal. At the same time demographic developments are progressivelypushing back the retirement age. All these elements mean that vitality hasbecome an essential competency in today’s labour market.

People work hard at USG People and the standards we set for ouremployees are high. In view of this in 2014 we launched a vitalityprogramme for higher management. The programme gave an initial group

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DEVELOPMENTS FOR OUREMPLOYEES—


of employees first-hand experience of the importance of vitality, both nowand in the future.

The participants were assigned a coach for six months, and individualintake and exit sessions were held comprising an online questionnaire,physical tests and coaching sessions, based upon which the participantsformulated their own personal objectives. In addition scientifically basedprogrammes on the physiology of the body and on how performance isaffected by exercise, relaxation, sleep, nutrition and stress were used toprovide participants with knowledge and insights into their personalchallenges and points for attention.

The initial introduction to this programme left us wanting more. In 2015vitality will become an increasingly important topic within USG People.Several star brands have already started to implement the topic or areseriously considering bringing it into practice in the short term.

ABSENTEEISMOur organisation provides a safe and healthy work environment for itsemployees and this helps to substantially limit absenteeism. Variousparameters in this area are monitored using the web-based tool HRControl. This provides an ongoing insight into developments, allowingtrends to be identified at an early stage so that steps can quickly be takenwhere necessary. The average absenteeism rate among indirect staff was4.4% in 2014, unchanged from the previous year.

WORKFORCE COMPOSITIONIn 2014 over 70% of staff were female. USG People has a relatively highpercentage of women at all layers of the organisation, from topmanagement through senior and middle management to staff. We pursuean active diversity policy. In the past three years this has resulted in agrowing percentage of women in management positions. In theNetherlands we are co-signatories to the 'Talent to the Top' Charter, aninitiative aimed at getting more women into management positions.

MALE29%

FEMALE71%

MALE-FEMALE COMPOSITION 2014 2013 2012

USG PEOPLEFemale 71% 72% 71%Male 29% 28% 29%

SENIOR MANAGEMENTFemale 40% 36% 36%Male 60% 64% 64%

MIDDLE MANAGEMENTFemale 50% 48% 44%Male 50% 52% 56%

In 2014 attrition dropped to 19% from 25% in 2013. The attrition rate istraditionally high in our industry and in recent years has also beenaffected by the restructuring operations implemented at our organisation.There is a balanced age distribution among our workforce: around 40% ofstaff are aged between 30 and 40, with around 30% being older and asimilar percentage being younger. There is also a good distribution interms of length of service.

THE WORKS COUNCILThe Executive Board regularly consults with employee representatives,including the Central Works Council in the Netherlands. During 2014 theCentral Works Council and the Executive Board met on eight occasions. Inaddition a deputation of the board and the chairman of the SupervisoryBoard met to discuss general day-to-day business. During the meetingsdiscussions were held on topics including further structuring of the starbrands and the plans with regard to innovation and the strategy to 2020.Furthermore a broad range of subjects were discussed, including thenomination of members for the Supervisory Board, the structure of the HRorganisation, future conditions of employment, mobility, training, pensionschemes and the wage policy. The Central Works Council met a total of 17times in 2014.

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FINANCING STRUCTURE (in millions of euros) 2014 2013

Share capital 478.9 459.6Closing price of USG People share (in euro) € 9.33 € 9.69Market capitalisation 755.6 779.9

SUBORDINATED BORROWINGSSyndicate of banks 58.7 58.1

OTHER LOANSNet bank debt 91.0 119.8Trade receivables sold 124.1 121.1

Balance sheet value of capital employed 628.6 637.5Net debt as a percentage of capital employed 23.8% 27.9%

RATIOSNet debt/underlying EBITDA 1.7 2.3Interest cover ratio 12.7 5.8

In line with our strategic financial objectives there was furtherimprovement in the balance sheet ratios in 2014. Shareholders’ equityincreased and there was a further decline in net debt, which fell by€ 28.2 million to € 149.7 million (2013: € 177.9 million). The reduction in netdebt also brought down the capital requirement. The balance sheet valueof capital employed fell from € 637.5 million to € 628.6 million. Addition ofthe 2014 result boosted shareholders’ equity by € 19.3 million and therewas an improvement in the net debt/equity ratio. The leverage ratio andinterest coverage ratio also improved, as a result of both the reduction innet debt and the higher result in 2014. Over the past years the net debthas fallen to a level below the strategic target of a maximum of two timesunderlying EBITDA. Now this level has been reached we are aiming for afurther reduction in net debt in order to strengthen the balance sheet evenfurther. Consequently the strategic target for the maximum net debt levelwas tightened in 2014 to one time (underlying) EBITDA.

At end-2014 market capitalisation stood at € 755.6 million (end-2013:€ 779.9 million). On balance there was no rise in the USG People shareprice in 2014. While there was a positive trend at the start of the year,sentiment subsequently changed due to uncertain macroeconomicconditions and a modest outlook for economic growth, resulting in a slightfall in the share price over the full year.

DIVIDENDIn 2014 shareholders received a dividend of € 0.14 per share (2013: € 0.12).In line with the dividend policy one-third of net income beforeamortisation of acquisition-related intangible assets was distributed ascash or stock dividend.

Along with the tightening of the net debt target in 2014 there was also achange to the dividend policy. The provision for the annual distribution of adividend in a choice of cash or shares has been changed to a distributionin cash only. Starting from the 2014 financial year dividend proposals shalltherefore be based on a cash-only distribution.

Moreover, once the new net debt target has been achieved the dividenddistribution level will be raised to 40% of net income before amortisationof acquisition-related intangible assets after allocations to the statutoryreserves.

At end-2014 the net debt/EBITDA ratio was 1.7 meaning that, pursuant tothe policy, one-third of net income will be distributed as dividend for the2014 financial year. In view of the positive development of our results andthe favourable reduction of net debt, the dividend proposal was adjustedfor an impairment of deferred income tax assets. This put the result forthe calculation of dividend at € 39.5 million. In line with the dividend policyone-third of this amount is available for dividend distribution. Divided by80.9 million shares this equates to a dividend distribution of € 0.16 pershare.

At the General Meeting of Shareholders on 7 May 2015 the ExecutiveBoard will propose a dividend of € 0.16 per ordinary share, payable incash.

(in millions of euros) 2014

Net income 25.9Amortisation of acquisition-related intangible fixed assets aftertaxes 4.5Impairment of deferred income tax assets 9.1Net result for calculation of dividend 39.5Net debt/underlying EBITDA 1.7Available for dividend distribution (1/3) 13.2Cash dividend per share € 0.16

RESULT PER SHAREThe result per share is based on the result before amortisation ofacquisition-related intangible assets. In 2014 there were non-recurringeffects on results related to the costs of restructuring projects. Becausethese effects give a distorted view of the underlying profitability of ouractivities, underlying results are used to calculate the result per share. Webelieve that this provides an accurate picture of the underlying operatingresults.

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DEVELOPMENTS FOR OURCAPITAL PROVIDERS—


(in millions of euros) 2014

Underlying net income 51.9Net amortisation of acquisition-related intangible fixed assets 4.5Net income for calculation of result per share 56.4

The result per share is calculated based on the average number of shares.For 2014 the underlying result per share was € 0.70 (2013: € 0.42).

INFORMATION PER SHARE BASED ON AVERAGE NUMBER OF SHARES(in euros) 2014 20131)

Earnings per share 0.70 0.42Operating cash flow 0.88 0.33Net income 0.32 -0.33Dividend 0.16 0.14

1) 2013 has not been adjusted for dilution resulting from the distribution ofstock dividends.

SHARE PRICE AND VOLUME DEVELOPMENTThe ordinary shares of USG People are listed on Euronext Amsterdam,where options on the shares are also traded. The USG People share priceclosed the year at € 9.33 (end-2013: € 9.69). In 2014 the share prices themajor listed HR services providers underperformed the general indices;the AEX index rose 5.6% while share prices in our sector fell. Compared toour industry peers USG People saw a limited fall in the share price duringthe course of the year. The shaky sentiment in the market was partlyattributable to a more unpredictable macroeconomic outlook and modestexpectations for economic growth. The year started well, with the shareprice climbing to a high of € 14.10 before starting a downward trend inMarch amid exceptionally high volatility. From its high on 6 March theshare price slumped to a low of € 7.47 in early November. From Novemberthere was a recovery which saw the share price increase again to reach itsclosing level of € 9.33 at the end of the year.

share price development of USG People in 2014 compared to AEX index and peers

40

60

80

100

120

140

160

Adecco USG People Randstad Manpower Kelly Services BrunelAEX-Index

12-31-2013 12-31-201403-31-2014 06-30-2014 09-30-2014

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At end-2014 the number of outstanding ordinary USG People shares was80,957,360. The number of outstanding shares increased by 473,683 in2014, mainly as a result of part of the 2013 optional dividend beingdistributed in stock.

OUTSTANDING SHARES NUMBER

Ordinary shares 2013 80,483,677Shares distributed as stock dividend 454,043Distribution under the share plan 19,640Ordinary shares 2014 80,957,360

The number of shares owned by Alex Mulder, the founder of USG People,was virtually unchanged from the previous year. With a holding of16,119,233 shares Mulder owns a 19.9% stake in USG People. The freefloat of the ordinary shares of USG People is 100%.

Trading volumes in USG People shares rose during 2014. The number ofshares traded was 35 million, up 30% on the previous year. The volume ofshares traded was € 1.6 billion in 2014, up 90% on 2013.

TRADING VOLUMES 2014 2013 2012 2011 2010

Number of shares in millions 153 118 93 104 113Trading volumes in millions of euros 1,585 835 598 1,032 1,447

DISCLOSURE OF MAJOR HOLDINGSUnder the Dutch Act on the Disclosure of Major Holdings in ListedCompanies the following interests were declared as at 31 December 2014:

Alex Mulder: 19.9%Dimensional Fund Advisors, L.P. 3.6%

SHAREHOLDINGS OF EXECUTIVE BOARD AND SUPERVISORY BOARDMEMBERSEXECUTIVE BOARDRob Zandbergen: 96,229 sharesLeen Geirnaerdt: 4,391 shares

SUPERVISORY BOARDAlex Mulder: 16,119,233 shares

INVESTOR RELATIONSTwo analysts’ meetings were held in 2014, one at the presentation of the2013 annual results and the other at the 2014 half-year results. The firstand third-quarter results were presented and discussed in a conferencecall. These gatherings were accessible via webcasts from the USG Peoplewebsite. In the interests of direct contact with shareholders and investors,in 2014 roadshows were organised and conferences attended in theBenelux, the United Kingdom, the United States, France and Italy.

USG People is followed actively by around 10 analysts representing mostmajor brokers and securities houses which are relevant to USG People.

INVESTOR CONFERENCES AND ROADSHOWSAmsterdam | Brussels | London | New York | Boston | Paris | Milan

executive report


Having strengthened the base in 2013, in 2014 we proceeded to makesubstantial progress on all our strategic objectives. In addition to theinitiatives to reinforce our existing positions we realised our objectives toexpand in growth markets and to develop our high value-added services.At the same time with regard to our financial targets we increasedprofitability and further strengthened the balance sheet. Project Unitedwas completed in 2014 providing a solid foundation to build upon and forfurther growth. Our investments in existing activities and in the acquisitionof stakes in providers of online business solutions further reinforced ourposition. All these factors together form a good point of departure for thefurther execution and realisation of our strategic growth and profitabilitytargets.

GEOGRAPHICAL SCOPEFollowing the concentration of our activities in four core countries ourstrategy is primarily targeted at growing our market positions within thecurrent geographical scope. The HR markets in which we operate provide afundamentally good environment for realising our objectives. In 2014 ourstrategic initiatives enabled us to take advantage of this in various ways;on the one hand through a sharp focus on commercial and operationalexcellence at the star brands and on the other by expanding our serviceswith technology-driven concepts, including online services. Although thestar brands have no ambition to physically expand their geographicalpositioning, the provision of services online and through mobile networksis less encumbered by national borders. In this sense online businesssolutions offer a potentially unlimited scope for international services andgrowth. The operating area of online business solutions (Adver-Online) hasalready radiated out to outside our core countries, mainly due to demandfrom clients who are internationally positioned, with services beingsupplied from the Netherlands.

STRENGTHENING OF THE BALANCE SHEET AND CHANGE IN DIVIDENDPOLICYOver the past years the net debt has fallen to a level below the strategictarget set in 2011 of a maximum of two times EBITDA. Now this level hasbeen reached we are aiming for a further reduction of the debt in order tostrengthen the balance sheet even further. Consequently in 2014 wedecided to tighten the strategic target for the maximum net debt level toone time underlying EBITDA.

Along with the tightening of the net debt target we also changed thedividend policy. The dividend policy is based on a distribution of one-thirdof net income before amortisation of acquisition-related intangible assetsafter allocations to the statutory reserves. To date it was decided annuallywhether the dividend would be distributed in a choice of cash or shares orin cash only. From 2014 dividend proposals shall be based on a cash-onlydistribution.

Moreover, once the new net debt target has been achieved the dividenddistribution level will be raised from one-third to 40% of net income beforeamortisation of acquisition-related intangible assets after allocations tothe statutory reserves.

SUMMARY OF STRATEGIC INITIATIVES CARRIED OUT IN 2014 BY TARGET

STRENGTHENING OF EXISTING LEADERSHIP POSITIONS• Project United (combining of the brands into four star brands) executed

and completed.• Back office streamlined in the light of Project United.• Commercial strength increased due to further improvement in the cost

base on the one hand and the combination of brands on the other.• Innovative strength increased thanks to collaboration between the star

brands and the stakes in technology-driven operations.• Distribution channels revamped: modernisation of branches and

projects carried out to aid online distribution.• Investment in technology to optimise end-to-end processes.• Investment in labour market development initiatives.

INCREASED EXPOSURE TO GROWTH MARKETS• Investment in online business solutions: acquisition of Netwerven,

Blue Carpet and Connecting-Expertise.• 'Assistant Plus' online concept implemented by Secretary Plus.• Branch network in France expanded in growth regions.

EXPANSION OF HIGH VALUE-ADDED CONCEPTS• Solvus concept implemented (services with high added value:

recruitment process outsourcing (RPO), career transition andperformance & development).

• Services in outsourcing, in-house and payrolling concepts expanded.

AVERAGE EBITA MARGIN OF 6% ACROSS THE CYCLE (FROM 2014)• Operating leverage increased: absolute lowering of cost base in

conjunction with higher revenue.• High-yielding activities acquired.• Flexibility of cost structure increased.

DEBT RATIO OF MAXIMUM 1.0• Further reduction in absolute net debt.• EBITDA increased due to revenue growth and operating leverage.• Leverage ratio reduced from 2.3 to 1.7.

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STRATEGY EXECUTION SUMMARY—


NEXT STEPS IN STRATEGY EXECUTIONFollowing the successful completion of Project United in 2014 each of ourstar brands – Start People, Unique, Secretary Plus en USG Professionals –has a clear and distinctive focus in its own market segment. With thispositioning as well as a commercial excellence programme we aim toincrease our market share in the four core countries.

We will continue to focus closely on operational excellence and furtherincreasing the agility of our organisation. In all countries the aim is tofurther improve the end-to-end processes through simplification andstandardisation. This purpose of this simplification is to lower costs inboth the back and the front office.

We will also continue to modernise our distribution channels, workingtowards an integrated distribution solution comprising physical branchesas well as online and mobile channels.

We will also concentrate on developing solutions with high added(financial and social) value for our clients and candidates. In 2013 and2014 we already invested in new business models for providing onlinebusiness solutions, such as Adver-Online and Netwerven. These newconcepts, for which we are targeting high organic growth, will continue tobe rolled out within the organisation in 2015. This will also enable the starbrands to accelerate their development and growth in providing businesssolutions within our existing networks.

Technology will once again be an important area of development andinvestment in 2015, both in terms of further process optimisation anddevelopment of innovative scalable services. Product and processinnovation is one of the ways in which we constantly develop our addedvalue and the contribution we make to the labour market.

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In 2014 risk sessions were held at all the major operating companies andshared service centers within our organisation in order to identify the mainlocal strategic, financial and operating risks. These were aggregated andassessed for likelihood and impact by our line management andsubsequently discussed in detail with the audit committee and theSupervisory Board. A detailed description of our risk managementincluding our risk attitude can be found in the governance section. Thefollowing is a description of the main risks that could affect our strategicobjectives and the mitigating measures from the risk managementsessions held in 2014.

STRENGTHENING EXISTING LEADERSHIP POSITIONS:The risk of a decline in market share as a result of newcomers to markets/market segments and/or the application of new online or social media-related technology.In 2014 we strengthened our focus on commercial and operationalexcellence and on innovation. The strategy sets out two clear tracks whichdirectly support our competitiveness and encourage innovation. In 2014we invested in stakes in technology-driven companies. We also organisedinternal sessions aimed at encouraging innovation and the application oftechnology within the organisation. We work constantly to further optimiseand diversify our portfolio of services. The boards of the star brands areclosely involved in the development of innovative solutions and in productoptimisation.

The risk of falling behind the competition due to an inability to promptlyadapt the distribution model to online developments.In terms of the distribution network the current market shows a cleartrend towards fewer but larger branches. An infrastructure with largebranches has more flexible costs, making it easier to adjust the cost basein line with market fluctuations. Over the past years the distribution modelhas repeatedly been adapted to the prevailing conditions in the marketand will need to be structured so as to be flexible enough to continue to beable to adapt to further changes in the future.

In addition we are continuing to invest in innovations and ICT for thefurther development of the processes and online services. The USG PeopleICT Strategy Committee, which is chaired by the CFO, devotes a great dealof attention to this.

The risk of losing major clients that undertake intercontinentalprocurement.The increased focus on our four core countries has limited the scope ofour international services in terms of supplying organisations thatundertake intercontinental procurement. Concentration on four countriesis a strategic choice whereby a possible limitation of intercontinentalservices is accepted as an inherent risk. We are increasingly focusing onreinforcing our competitive position – the added value of our services, our

infrastructure, our knowledge, the adaptability of our organisation – in ourfour core countries to enable us to provide our clients with high-qualityservices in these regions at competitive prices. Our concentration on fourcountries ensures a strong focus on all the prevailing labour markettrends; this gives us a competitive edge, which makes us an attractivepartner – also for large clients in these markets.

Non-compliance with (changing) legislation and regulations.Changing legislation is spotted in good time and the impact of the changesanalysed. Based on this impact analysis initiatives are taken in order toensure that we continue to comply with legislation and regulations. Wehave a zero-tolerance policy on compliance violations. Under this policyour existing monitoring and control measures are frequently evaluated asto whether they are still fit for purpose.

The risk that changes in legislation and regulations might haveconsiderable negative implications for our business models to which weare unable to respond promptly.Legislation and regulations change frequently in our markets. This risk notonly has a high likelihood but also a large impact. On the one hand failureto adapt a business model promptly can result in lower margins and onthe other hand there is the risk of regulatory fines. In light of this we havesound expertise with regard to legislation and regulations which is sharedand leveraged commercially. USG People’s Corporate Legal departmentmaintains close contact with internal and external experts in the countrieswhere we operate and shares its findings with the operating companiesactive in those countries. The department also reports periodically to theExecutive Board and the Supervisory Board on the most importantdevelopments in the area of legislation and regulations. We maintain closelinks with the policymakers both in order to advise them on possiblechanges and to be involved in any forthcoming changes from an earlystage.

The risk of data loss or breach of data integrity.We have implemented a comprehensive ICT security policy. TheInformation Security Board – the framework and monitoring body – holdsfrequent meetings. The board, which comprises people in variouspositions, discusses issues and takes measures in relation to ICT security.

The risk of inefficient processes due to inadequate technological supportof the business.We are developing a uniform front office system. This system has currentlybeen rolled out at a number of brands in Belgium, and will be implementedin the rest of Belgium and subsequently in the Netherlands. Findings oftechnological landscape studies should help further enhance the supportof the business. In 2014 this resulted in even better collaboration betweenthe Shared Service Center and the star brands in the Netherlands. In 2015we will actively work towards more chain responsibility.

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RISK MANAGEMENT—


STRENGTHENING EXISTING LEADERSHIP POSITIONS, INCREASINGEXPOSURE IN GROWTH MARKETS, EXPANSION OF CONCEPTS WITH HIGHADDED VALUE:The risk of a leveraged balance sheet with limited cash for the desiredexpansion and realisation of the strategy.In 2014 the debt position was below the strategic target (net debt of nomore than two times EBITDA) as defined in the strategy redesign of 2012.In 2014 we tightened the debt position target to a maximum of one timefull-year EBITDA. This target can be met through an increase in EBITDA onthe one hand and a reduction in the debt level in absolute terms on theother. In view of this free cash flow in the short term will partly be used forfurther debt repayments, with the Executive Board in each case weighingopportunities to enable the desired EBITDA growth against the desirabilityof reducing debt.

The risk of being unable to retain the right people and knowledge for asuccessful realisation of the strategy.USG People is an attractive organisation for ambitious and talentedemployees that pays a great deal of attention to personal developmentand growth. We invest on an ongoing basis in being a good employer andprovide many opportunities for talent development, including trainingcourses. To safeguard succession to key posts we have implemented asuccession planning process aimed at the further development of talentand effective progression within our organisation. Each year we conduct a'Great Place to Work' (GPTW) survey and use the findings as amanagement tool. GPTW is also included in the non-financial targets forthe general managers. Higher scores should make USG People a moreattractive employer.

The risk that an inflexible cost structure will reduce the profit margin in adownward economy.In the past few years we have made the cost structure more flexible. Thebranch network has been adapted to a network of fewer but largerbranches, which better enables capacity to fluctuate with the market. Inaddition our personnel organisation has a flexible shell and a number ofour non-core processes have been outsourced. Furthermore greaterflexibility has been built into the contracts with suppliers. These measuresenable us to stabilise profitability throughout the cycle. The flexibility isused as a buffer against falling margins in the event of a sudden drop inrevenue. Flexibility is measured and discussed on a quarterly basis, withadjustments in the operations being made if necessary.

In order to reduce cyclicality we also develop value-added models in ourservices which are less susceptible to economic trends. In addition wetake on contracts that generate more constant revenue, for examplethrough the services of Adver-Online. The degree of non-cyclical revenueis a topic covered in reports to the Executive Board. This attention isnecessary to ensure greater future margin stability and to minimise the

impact of a downward turn in the economy. The developments in theseareas are discussed at the periodical business reviews with the seniormanagement.

The risk of claims as a result of a shift from best-effort contracts tooutcome-based contracts in a move we have failed to adequatelyrecognise/predict.Outcome-based contracts are accompanied by a risk analysis and areapproved at the appropriate responsibility levels before the undertaking isfinalised. For each contract it will be determined what the maximum riskprofile is and what risks are acceptable and/or potentially transferable toa third party. In the case of new contract forms of which the risks are notyet sufficiently visible USG People will aim to secure a small-scale pilotcontract in order to reduce the potentially large impact.

The risks described above are related to our objectives, our strategy andits operationalisation. These risks and measures should be taken intoaccount when evaluating other information in this annual report. Adescription of the financial risks is included in the financial statements.

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In 2014 we made progress with all five spearheads of our sustainabilitypolicy. A summary of the results and ambitions of each individualspearhead is provided below.

1. BEING A GOOD EMPLOYERTRAINING AND DEVELOPMENTUSG People pays a great deal of attention to training and developmentwithin the wide variety of positions and organisational needs. We providegood perks and opportunities for our employees to develop and grow.

In 2014 we achieved the following:• Launch of a structural high-potential programme for USG People front-

runners in cooperation with Vlerick Business School.• Action-planning in response to the outcome of the 2013 Great Place to

Work survey.• Improvement in the employee satisfaction score from 6.6 to 7.0 (on a

scale of 1 to 10).

In 2015 we aim to:• Focus on the broad sustainable employability of our staff, including

increased attention for training and development opportunities.• Embark on a new year of our Frontrunners talent development

programme for middle management.• Launch a programme for senior management in cooperation with

Vlerick Business School.• Introduce a web-based assessment process (including 360° feedback)

for all employees.• Execute plans of action to further increase employee satisfaction, as

measured by the Great Place to Work survey.

kpi• Amount spent on training direct and indirect employees measured

against total staffing expenses (indirect employees) or the total cost ofrevenue (direct employees).

VITALITY AND HEALTHUSG People wants to provide its employees – i.e. both its direct andindirect employees – with a safe, healthy and inspiring workplace. We aimto maximise talent and in doing so benefit the circular job market.

In 2014 we achieved the following:• Launch of vitality plan for first group of managers in Belgium and the

Netherlands.• Further rollout of new HR management system to improve the

management of attrition and absenteeism.• Completion of various initial studies by the vitality steering group.

In 2015 we aim to:• Launch the ‘Good life, healthy mind, happy body’ vitality programme for

all employees of the Shared Services Center the Netherlands and thecorporate organisation.

• Launch the intensive vitality plan for the second group of management.

‘WIKI WORKING’USG People wants to be an innovative and even more attractive employerthat encourages and facilitates its employees to work in a smarter, moreinnovative way and to remain sustainably employable.

In 2014 we achieved the following:• Publication of inspiration paper about the future of the job market –

‘wiki working’.• Launch of project group 'working conditions of the future’.• Various investments made in innovative – often web-based – business

models, providing employees with the best possible digital support,e.g. by using e-portfolios.

In 2015 we aim to:• Further elaborate on the trends and consequences of these trends for

the job market, as defined in the 'wiki working' inspiration paper.• Finalise decision-making surrounding 'working conditions of the future’

and commence preparations for the implementation.• Further implement online business solutions to improve processes and

solutions, making it possible to work in a more innovative and smarterway.

kpi• Employee satisfaction and employee engagement.

2. SOUND BUSINESS PRACTICEINTEGRITY AND TRANSPARENCYUSG People expects all indirect employees to adhere to the five businessprinciples in their daily activities. Operating with integrity and in a clearand transparent way is constantly assessed.

In 2014 we achieved the following:• Obtained a Bronze Fira certificate.• Published the second SR report.• Started implementing SR KPIs.• Implemented integrated reporting.• Involved stakeholders in SR policy.

In 2015 we aim to:• Focus on central reporting and steering for SR KPIs.• Continue to involve stakeholders in SR policy.

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SR POLICY: RESULTS AND AMBITIONS—


kpi• Customer satisfaction

LEADERSHIPUSG People aims to achieve a type of leadership based on trust andresponsibility, with room for personal leadership, converting the strategyinto results in practical way. In a wider context we want help develop thejob market.

In 2014 we achieved the following:• Publication of inspiration paper about the future of the job market –

‘wiki working’.• Launch of vitality plan for first group of managers in Belgium and the

Netherlands.• Launch of Frontrunners talent development programme for middle

management.

In 2015 we aim to:• Further elaborate on the trends and consequences of these trends for

the job market, as defined in the 'wiki working' inspiration paper.• Launch the Frontrunners talent management programme for second

group of middle management.• Continue to focus on personal leadership and helping people draw on

their strengths.

RESPONSIBLE PROCUREMENTUSG People wants to promote responsible procurement.

In 2014 we achieved the following:• Obtained a Bronze Fira certificate.• Further embedded and implemented a responsible procurement policy.

In 2015 we aim to:• Continue to focus on responsible procurement in the wider chain.

3. DIVERSITYSTAFFING COMPOSITION OF INDIRECT EMPLOYEESUSG People wants to be an inclusive organisation where the diversetalents and skills of everyone are maximised and where everyonecontributes to earnings to the best of their ability.

In 2014 we achieved the following:• Drafted ‘USG People goes inclusive’ plan of action.• Placement of people further removed from the job market within

USG People.

In 2015 we aim to:• Implement 'USG People goes inclusive’ action plan.• Place at least nine people further removed from the job market within

USG People in the Netherlands.

kpi• Number of people further removed from the job market employed

within USG People.

COMBATTING DISCRIMINATIONUSG People aims to banish discrimination, misconduct and inappropriatebehaviour.

In 2014 we achieved the following:• Set up Anti-discrimination working group aimed at banishing

discrimination by constantly highlighting the subject and making itopen to discussion.

In 2015 we aim to:• Implement an action plan drafted by the Anti-discrimination working

group.

4. CORPORATE CITIZENSHIPPLACEMENT OF PEOPLE FURTHER REMOVED FROM THE JOB MARKETUSG People wants to play a leading role in helping people with restrictedchances on the job market find a job.

In 2014 we achieved the following:• Introduction of the ‘Generation scheme’ which enables older

employees to gradually step aside for younger employees, thuscontributing to a better flow to the job market and reducing youthunemployment.

• Placement of people who are further removed from the job market withclients.

In 2015 we aim to:• Further expand the services, consultancy operations and other

activities of USG Restart and the star brands to help people withrestricted chances on the job market find a regular job.

kpi• Number of people further removed from the job market that

USG People has helped find a job or reintegrate.

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COMMUNITY INVOLVEMENT AND CHARITABLE CAUSESUSG People wants to encourage and make it easier for employees tovolunteer in society and help others.

In 2014 we achieved the following:• Signed a cooperation agreement with Fier, helping victims of abusive

relationships enter the job market or reintegrate.• Trained the first group of language trainers within USG People and

started helping a group of people who have difficulty reading andwriting, ensuing from the cooperation agreement signed betweenStichting Lezen & Schrijven and USG People.

• Start People signed a cooperation agreement with change= to helpyoung people with a job find affordable housing.

• The five star brands supported various initiatives that contribute toimproving society and helping others.

In 2015 we aim to:• Continue to encourage employees to become a language teacher for

Stichting Lezen & Schrijven.• Further shape the cooperation with Fier.

5. ENVIRONMENTAL IMPACTUSG People wants to limit the negative impact of its activities on thenatural environment as much as possible. Our objective in this respect isto reduce our CO2 footprint by 10 percent in 2015 compared to 2011.

In 2014 we achieved the following:• Drafted a CO2 reduction plan.• Performed a broad study into mobility and used the outcome to outline

a new mobility policy.• Lowered and compensated CO2 emissions at Unique and Start People

in the Netherlands, resulting in both companies being climate neutral.• Participated in the Low Car Diet.

In 2015 we aim to:• Embed the CO2 reduction plan in the organisation.• Finalise the mobility policy.

kpi• CO2 emissions per FTE.

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Our strategy has resulted in improvements to many aspects of both ourorganisation and our performance. In 2015 we will continue along thegrowth path we have embarked upon. In doing so we will proceed alongtwo tracks which go hand in hand and which will lead to a strong marketposition today and good prospects for tomorrow. The scope of theeconomic recovery broadened during the second half of 2014, with thelater-cyclical market sectors now also showing a recovery and increaseddemand for staff. The demand for capacity, which had already picked upamong large, export-oriented companies, is now also recovering amongsmall and medium-sized businesses. In addition over the last few monthswe have seen strong growth in demand for permanent placements, anindication that staffing levels at companies have risen and businessconfidence has increased. These developments have continued in theearly months of 2015. We expect that this positive trend will continue in2015 and will support a growing demand for our services. In 2015 we willfurther develop the added value provided by our services and furtherexpand our range of services, for example in the area of businesssolutions.

Within our operations we will retain our focus on commercial andoperational excellence and innovation in order to provide our clients withthe best possible service in this phase of recovery in the markets and togrow results for all our stakeholders.

executive report

OUTLOOK—


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FINANCIALSTATEMENTS—


FINANCIAL STATEMENTS— 84

Consolidated financial statements 86Consolidated income statement 86Consolidated statement of comprehensive income 86Consolidated balance sheet as at 31 December 87Consolidated statement of changes in equity 88Consolidated statement of cash flows 90Notes to the consolidated financial statements 91

01 | General information 9102 | Summary of significant accounting policies 9103 | Financial risk management 9804 | Acquisitions and divestments 10305 | Operating segments 10806 | Cost of sales 11107 | Operating expenses 11108 | Finance costs 11209 | Finance income 11210 | Share of income of associates 11311 | Income tax expense 11312 | Property, plant and equipment 11613 | Goodwill 11714 | Other intangible assets 11915 | Financial fixed assets 12016 | Trade and other receivables 12017 | Cash and cash equivalents and bank overdrafts 12118 | Total equity 12219 | Earnings per share attributable to equity holders 12220 | Borrowings 12321 | Derivative financial instruments 12422 | Pension-related liabilities 12523 | Provisions 12824 | Bank overdrafts and borrowings 12925 | Trade and other payables 129

26 | Share-based remuneration 12927 | Related parties 13328 | Commitments 13729 | Contingent assets and liabilities 13730 | Events after balance sheet date 13831 | Principal subsidiaries and associates 138

Company financial statements 139Company income statement 139Company balance sheet as at 31 December (before profitappropriation) 139Notes to the company income statement and balance sheet 140

01 | Accounting policies 14002 | Intangible assets 14003 | Property, plant and equipment 14004 | Subsidiaries 14105 | Other financial fixed assets 14106 | Deferred income tax assets 14107 | Other current receivables 14208 | Current income tax receivables 14209 | Equity 14210 | Provisions 14311 | Non-current liabilities 14312 | Current liabilities 14313 | Employees 14314 | Liability 14415 | Audit fees 14416 | Remuneration of the Executive Board and Supervisory

Board 144Other data 145

Events after the balance sheet date 145Provisions in the articles of association regarding profitappropriation 145Profit appropriation 146Independent auditor's report 147

CONTENTS—


CONSOLIDATED FINANCIALSTATEMENTS—CONSOLIDATED INCOME STATEMENT

amounts in thousands of euros note: 2014 2013

Revenue 2,355,032 2,270,031Cost of sales 6 -1,862,932 -1,783,088Gross profit 492,100 486,943

Selling expenses -338,911 -355,133Amortisation of acquisition-related intangible assets -6,371 -14,244Total selling expenses -345,282 -369,377General and administrative expenses -79,645 -104,954Total operating expenses 7 -424,927 -474,331Net income from divestment 4 - 28,688Operating income 67,173 41,300

Finance costs 8 -12,275 -16,491Finance income 9 2,736 6,909Net finance costs -9,539 -9,582Share of income of associates 10 -19 14Income before tax 57,615 31,732

Income tax expenses 11 -29,501 -19,513Net income from continuing operations 28,114 12,219

Net income from discontinued operations 4 -1,751 -38,290NET INCOME 26,363 -26,071

ATTRIBUTABLE TO:Equity holders of the company 25,855 -26,058Non-controlling interests 508 -13

26,363 -26,071EARNINGS PER SHARE FROM CONTINUING AND DISCONTINUED OPERATIONSATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY(in euros, per share of € 0.50 nominal)Basic earnings per share 19From net income from continuing operations € 0.34 € 0.15From net income from discontinued operations - € 0.02 - € 0.48From net income € 0.32 - € 0.33

Diluted earnings per share 19From net income from continuing operations € 0.34 € 0.15From net income from discontinued operations - € 0.02 - € 0.48From net income € 0.32 - € 0.33

consolidated financial statements


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Net income 26,363 -26,071

Other comprehensive income after tax:

Items that will not be reclassified to the income statement:- Remeasurement of pension liability 22 -566 203

-566 203Items that may be reclassified to the income statement:- Cash flow hedge 21 -322 -34- Currency translation differences -7 456

-329 422Other comprehensive income after tax -895 625TOTAL COMPREHENSIVE INCOME 25,468 -25,446

ATTRIBUTABLE TO:Equity holders of the company 24,960 -25,433Non-controlling interests 508 -13

25,468 -25,446



CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER


ASSETS

Property, plant and equipment 12 16,257 16,329Goodwill 13 683,084 678,171Other intangible assets 14 57,995 59,974Financial fixed assets 15 52,675 26,954Deferred income tax assets 11 49,877 62,507Non-current assets 859,888 843,935

Trade and other receivables 16 294,383 279,903Current income tax receivables 2,211 1,793Cash and cash equivalents 17 64,691 63,965Current assets 361,285 345,661

TOTAL ASSETS 1,221,173 1,189,596

EQUITY AND LIABILITIES

Paid-up and called-up capital 40,479 40,242Share premium 365,921 366,148Reserves 70,704 51,945Equity attributable to holders of the company 477,104 458,335Non-controlling interests 1,824 1,249Total equity 18 478,928 459,584

Borrowings 20 214,515 209,327Derivate financial instruments 21 583 46Pension-related liabilities 22 5,928 6,201Provisions 23 31,433 36,298Deferred income tax liabilities 11 7,333 7,747Non-current liabilities 259,792 259,619

Bank overdrafts and borrowings 24 7,630 32,532Trade and other payables 25 424,896 396,000Current income tax liabilities 22,508 9,900Provisions 23 27,419 31,961Current liabilities 482,453 470,393

Total liabilities 742,245 730,012

TOTAL EQUITY AND LIABILITIES 1,221,173 1,189,596



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

amounts in thousands of euros note:

ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANYNON-

CONTROLLINGINTERESTS TOTAL EQUITY

PAID-UP ANDCALLED-UP

CAPITALSHARE

PREMIUM RESERVES SUB-TOTAL

Balance as at 1 January 2013 39,858 366,532 82,534 488,924 551 489,475

Net income - - -26,058 -26,058 -13 -26,071Remeasurement of pension liability 22 - - 203 203 - 203Cash flow hedge 21 - - -34 -34 - -34Currency translation differences - - -47 -47 - -47Currency translation differences resultingfrom divestment of subsidiaries 4 - - 503 503 - 503Total comprehensive income - - -25,433 -25,433 -13 -25,446

Change share plan 26 - - -180 -180 - -180Acquisition of subsidiary 4 - - - - 785 785Stock dividend for 2012 18 384 -384 - - - -Cash dividend for 2012 18 - - -4,976 -4,976 - -4,976Dividend paid to holders of non-controllinginterests - - - - -74 -74

384 -384 -5,156 -5,156 711 -4,445

BALANCE AS AT 31 DECEMBER 2013 40,242 366,148 51,945 458,335 1,249 459,584

Balance as at 1 January 2014 40,242 366,148 51,945 458,335 1,249 459,584

Net income - - 25,855 25,855 508 26,363Remeasurement of pension liability 22 - - -566 -566 - -566Cash flow hedge 21 - - -322 -322 - -322Currency translation differences - - -7 -7 - -7Total comprehensive income - - 24,960 24,960 508 25,468

Change from settlement of share plan 26 10 - - 10 - 10Change share plan 26 - - 89 89 - 89Acquisition of subsidiary 4 - - - - 92 92Stock dividend for 2013 18 227 -227 - -Cash dividend for 2013 18 - - -6,290 -6,290 - -6,290Dividend paid to holders of non-controllinginterests - - - - -25 -25

237 -227 -6,201 -6,191 67 -6,124

BALANCE AS AT 31 DECEMBER 2014 40,479 365,921 70,704 477,104 1,824 478,928



CONSOLIDATED STATEMENT OF CASH FLOWSamounts in thousands of euros note: 2014 2013

CASH FLOW FROM OPERATING ACTIVITIESIncome before tax 57,615 31,732Adjustments:Depreciation, amortisation and impairment of tangible and intangible assets 12,14 25,553 33,162Result on disposal of tangible and intangible assets 12,14 447 1,755Net income from divestment 4 - -28,688Other non-cash flow receivables 15 -18,588 -13,186Finance costs 8 12,275 16,491Finance income 9 -2,736 -6,909Share plan expenses processed via equity 26 89 -180Currency translation differences -10 -181Change in pension-related liabilities and provisions 22,23 -12,310 10,830Changes in working capital:- trade and other receivables -12,680 14,864- trade and other payables 27,855 -19,407Operating cash flow from continuing activities 77,510 40,283Income tax paid -6,431 -16,915Net cash flow from continuing operating activities 71,079 23,368Net cash flow from discontinued operating activities - 2,818Net cash flow from operating activities 71,079 26,186

CASH FLOW FROM INVESTING ACTIVITIESAcquisitions of subsidiaries 4 -3,722 -4,209Acquisition of associate 4 -3,400 -Investments in property, plant and equipment 12 -6,498 -3,570Investments in intangible assets 14 -11,955 -13,566Disposals of tangible and intangible assets 12,14 91 450Divestment of subsidiary 4 -669 81,443Payments on loans and guarantee deposits -1,620 -1,108Net cash flow from continuing investing activities -27,773 59,440Net cash flow from discontinued investing activities - -742Net cash flow from investing activities -27,773 58,698

CASH FLOW FROM FINANCING ACTIVITIESProceeds from issuance of shares 18 10 -Payments on derivative financial instruments -165 -6,211Proceeds from borrowings 20,24 77 62Repayments of borrowings 20,24 -17,513 -36,595Refinancing transaction expenses paid - -2,037Interest paid -7,763 -7,172Interest received 55 692Dividend paid to holders of non-controlling interests -25 -74Dividend paid -6,290 -4,976Net cash flow from continuing financing activities -31,614 -56,311Net cash flow from discontinued financing activities - -1,028Net cash flow from financing activities -31,614 -57,339

INCREASE CASH AND CASH EQUIVALENTS 11,692 27,545

CHANGE IN CASH AND CASH EQUIVALENTSCash and cash equivalents and bank overdrafts as at 1 January 48,947 21,402Increase in cash and cash equivalents 11,692 27,545CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AS AT 31 DECEMBER 17 60,639 48,947



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

01 | GENERAL INFORMATIONThe corporate structure of USG People N.V. is a legal entity with limited liability (public limited company). USG People N.V. has its registered office inAlmere. The shares of the company are listed on the NYSE Euronext Amsterdam stock exchange. The address of the company is:P.J. Oudweg 611314 CK AlmereThe Netherlands

USG People provides all types of flexible employment services and a range of other services in the area of human resources, education, training andcustomer care. The group operates in seven countries.

The consolidated IFRS financial statements of the company for the year ended 31 December 2014 comprise the company and its subsidiaries (togetherreferred to as ‘the group’). An overview of the main subsidiaries can be found in note 31.

The financial statements were prepared by the Executive Board. The financial statements were signed by the Supervisory Board on 25 February 2015and will be submitted to the General Meeting of Shareholders on 7 May 2015 for adoption.

02 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1. Basis of preparation of the financial statementsThe consolidated financial statements for 2014 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adoptedwithin the European Union.The euro (€) is the functional currency of most group companies. The presentation currency of the group in the financial statements is therefore theeuro. Amounts are shown in thousands of euros unless otherwise stated.Unless otherwise indicated the consolidated financial statements are based on historical cost. Financial assets and financial liabilities (includingderivative financial instruments) are initially recognised at fair value. Subsequent valuations of receivables and monetary financial liabilities are basedon amortised cost. Subsequent valuations of derivative financial instruments are based on fair value.

Preparing the financial statements in accordance with IFRS means that management is required to make assessments and estimates when applying theaccounting policies. Estimates and judgements are constantly assessed and are based on historical experience and other factors, includingexpectations of future events which, under the given circumstances, are considered to be reasonable. Estimates and assumptions that which could leadto material adjustments in the carrying value of assets and liabilities in the future are disclosed in these financial statements as Income tax expense(note 11), Goodwill (note 13), Pension-related liabilities (note 22), Provisions (note 23) and Contingent assets and liabilities (note 29).

The accounting policies have been applied consistently by the group companies during the periods presented in these consolidated financialstatements.

Comparative figuresNo events occurred that resulted in an amendment of the comparative figures. The share of income of associaties in the consolidated income statementhas been reclassified as from 2014 and is no longer included in operating income. The impact on 2014 is - € 19 (2013: € 14).

Standards, amendments and interpretations effective from the 2014 financial yearChanges to standards effective from 2014 and the possible impact on earnings, equity and notes of USG People are stated below.

IFRS 10 ‘Consolidated Financial Statements’. This standard identifies the concept of control as the determining factor in whether an entity should beincluded in the consolidated financial statements of the parent company and provides additional guidance where the determination of control is difficultto assess.

IFRS 12 ‘Disclosure of Interests in Other Entities’. This standard defines the disclosure requirements for all forms of interests in other entities, includingassociates and off balance sheet vehicles.

The aforementioned standards do not have a material impact on the amount and composition of group equity and earnings, nor on the notes.



Standards, amendments and interpretations not effective in the 2014 financial year but applicable to the groupIFRIC 21 ‘Levies’. This interpretation of IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ sets out criteria for the moment at which agovernment levy should be recognised as a liability on the balance sheet. The government levy is considered to be a liability at the moment that theobligating event that gives rise to the liability takes place and not the moment that the economic benefit ensuing from this liability is gained. IFRIC 21applies within the European Union for financial years commencing after 17 June 2014. The group will apply this standard with effect from the financialyear commencing on 1 January 2015.

IFRS 15 ‘Revenue from Contracts with Customers’. This standard defines the accounting policy for the recognition of revenue and provisions as regardsthe timing of the recognition of revenue. Application is mandatory for financial years commencing on or after 1 January 2017. This amendment is notexpected to have a material impact on the amount and composition of group equity and earnings. The group will apply this standard with effect from thefinancial year commencing on 1 January 2017.

IFRS 9 ‘Financial Instruments’. The standard determines the conditions for the classification and valuation of financial assets initially set out in IAS 39‘Financial Instruments: Recognition and Measurement’. Application is mandatory for financial years commencing on or after 1 January 2018. Thisamendment is not expected to have a material impact on the amount and composition of group equity and earnings. The group will apply this standardwith effect from the financial year commencing on 1 January 2018.

Other amendments of standards and interpretations which are not yet in effect are not expected to have a material impact on the amount andcomposition of group equity and earnings, nor on the notes.

2.2. Consolidation of subsidiariesSubsidiaries are fully consolidated from the date on which the group is exposed or entitled to changing revenue ensuing from its involvement in theentity and whereby the group has the possibility to influence that revenue by virtue of its control in the entity. Deconsolidation occurs from the momentthis is no longer the case.

The acquisition method applies to the initial recognition of subsidiaries by the group. The consideration transferred for the acquired company is basedon the fair value of the assets ceded, the equity instruments issued and liabilities incurred or assumed at the transaction date, including contingentconsiderations. Contingent considerations (such as earn-outs and future expansion of interest in subsidiaries through options or deferred acquisition)are owed if pre-determined conditions laid down in a contract have been met and are recognised at fair value (level 3). The likeliness of a contingentconsideration being paid is considered in the valuation on the transaction date and is reconsidered at each balance sheet date. Changes in the value ofcontingent considerations are recognised in the income statement as well as the transaction-related costs.

In the event of a gradual acquisition the interest of the acquired company which was already in the group’s ownership prior to the time of acquisition isrecognised at fair value. Changes in the value are recognised as finance costs or finance income in the income statement.

Identifiable assets, liabilities and contingent liabilities assumed in a business combination are initially stated in the financial statements at their fairvalue on the date of acquisition. The group recognises any non-controlling interest in the acquired entity at fair value or at the proportional interest ofthe non-controlling interest in the acquired net assets.

Goodwill is recognised as the positive difference between the consideration transferred and the fair value of the identifiable assets, liabilities andcontingent liabilities at the date of acquisition. If the consideration transferred is lower than the fair value, the difference is recognised in the incomestatement.

Transactions with minority shareholders, whereby decision-making control does not cease to exist, are recognised as transactions with groupshareholders. In the event of purchases of interests held by minority shareholders, the difference between the amount paid and the acquired share ofthe net asset value (recognised as non-controlling interests under shareholders’ equity) is added or charged to shareholders’ equity.

Transactions, balance sheet items and unrealised results on transactions between group companies are eliminated. Where necessary, the accountingpolicies of subsidiaries are brought into line with those applied by the group.

2.3. Operating segmentsOperating segments are reported in accordance with internally reported information to the chief operating decision-maker. The Executive Board isregarded as the chief operating decision-maker responsible for the allocation of funds to and the assessment of the operating segments.

The group is structured into segments and further analysed on a country basis. The Executive Board bases its decisions on this. Disclosure on theoperating segments is in keeping with this grouping, with a number of countries in several segments being combined due to their size.



2.4. Foreign currency2.4.1. GeneralItems in the financial statements of the various group companies are measured in the currency of the primary economic environment in which eachentity operates (the functional currency).

2.4.2. Foreign currency transactions and translationTransactions in foreign currency are translated into the functional currency at the exchange rate applicable at the date of the transactions. Currencytranslation differences resulting from the settlement of these transactions and the translation of the monetary assets and liabilities denominated inforeign currency at the balance sheet date are recognised as net finance costs in the income statement.

2.4.3. Group companiesThe results and financial positions of group companies with a functional currency other than the euro are calculated as follows:• assets and liabilities, including goodwill and fair-value adjustments arising on consolidation, are translated into euros at the exchange rates

applicable at the balance sheet date. Currency translation differences are recognised in other comprehensive income;• income and expenses are translated into euros at rates approximate to the exchange rates applicable at the date of the transaction.

In the event of the complete or partial divestment of foreign group companies with a currency other than the euro, currency translation differences arerecognised in the income statement as net income from divestments.

2.5. Property, plant and equipmentProperty, plant and equipment are carried at historical cost less depreciation, determined on the basis of estimated useful life and impairment losses.Historical cost consists of all expenses directly attributable to the acquisition of the asset.

Depreciation expenses are charged to the income statement using the straight-line method based on the estimated useful life of an asset according tothe component method. There is no depreciation on land.The estimated useful life of property, plant and equipment varies according to category, as shown below:

YEARS

Buildings 40Furnishings and conversions 5 - 10Computer and peripherals 3 - 5Other fixed assets 5

The residual value, method of depreciation and depreciation period are reviewed annually at the balance sheet date and adjusted if necessary by achange in the estimate for the financial year and subsequent periods.

2.6. GoodwillGoodwill arises from the acquisition of subsidiaries and is calculated as the difference between the consideration transferred and the fair value atacquisition date of the identifiable assets, liabilities and contingent liabilities acquired. For the purpose of impairment testing, goodwill is allocated tothose groups of cash-generating units expected to benefit from the acquisition.

Goodwill is not amortised. Please refer to 2.8. ‘Impairment of non-financial assets’ for further information.

If an entity is divested, the carrying amount of its goodwill is recognised in income. If the divestment concerns part of a group of cash-generating units,the amount of goodwill written off and recognised in income is determined on the basis of the relative value of the part divested compared to the valueof the entire group of cash-generating units.



2.7. Other intangible assets2.7.1. Intangible assets obtained through acquisitionIntangible assets obtained through acquisition consist of trademarks, customer relationships and software. These are initially recognised at fair valueand subsequently at cost. Intangible assets have a finite useful life and are carried at cost less amortisation and impairments. Amortisation is chargedto the income statement using the straight-line method based on the following estimated useful life:

YEARS

Trademarks 5 - 10Customer relationships 4 - 8Software 5 - 10

2.7.2. SoftwareSoftware licences are capitalised on the basis of the costs incurred to acquire the software and make it ready for use. Software developed in-house iscapitalised insofar as its cost price arises from the development and test phase of a project and insofar as it can be demonstrated that:• the project is technically feasible and suitable for use;• it is the intention to complete the project and use the software;• the software will generate proven economic benefits in the future;• technical, financial and other means are in place to complete and use the software, and• it is possible to determine the expenses attributable to the software developed in a reliable manner.

Expenses directly attributable to the software developed in-house consist of personnel expenses and an appropriate allocation of general expenses.Finance costs are also allocated to software developed in-house insofar as the development phase is longer than one year, using an interest rate equalto the average interest rate paid by the group in the financial year.

Software has a finite useful life and is carried at cost less amortisation and impairment. Amortisation is charged to the income statement using thestraight-line method based on the estimated useful life.

2.8. Impairment of non-financial assetsAssets that have an indefinite useful life, such as goodwill, are not subject to amortisation but to annual impairment testing or more often if events orcircumstances may necessitate an impairment. Assets subject to amortisation are assessed at such time as events or changes may necessitate animpairment.

An impairment loss is the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of anasset’s value in use and its fair value less selling expenses. The value in use is determined by calculating the present value of estimated future cashflows using a pre-tax discount factor which reflects both the current market assessment of the time value of money and the specific risk connected withthe asset.

For the purpose of impairment testing on goodwill, assets of cash-generating units are grouped at the lowest level within the group at which goodwill ismonitored for internal purposes. Non-financial assets other than goodwill that have been subject to impairment are assessed at each reporting date forpossible reversal of the impairment charge.

2.9. Financial fixed assets2.9.1. Loans and receivablesLoans and receivables are financial assets (not being derivative financial instruments) that are not quoted in an active market and have fixed ordeterminable repayment terms. They are initially recognised at fair value based on the date of payment and subsequently at amortised cost. Loans andreceivables are recognised as current assets, except if the maturity date is more than 12 months after the balance sheet date, in which case they areclassified as non-current assets. Current loans and receivables consist of trade and other receivables (see 2.10) and cash and cash equivalents (see2.12). Loans and receivables are no longer recognised as soon as the group has transferred the gains or losses relating to the loans and receivables to athird party or if the right to receive payments has ceased to exist.

2.9.2. Guarantee depositsGuarantee deposits (mainly rental guarantees and guarantees connected with the running of a temporary staffing business) are initially recognised atfair value based on the date of payment and subsequently at amortised cost using the effective interest method.



2.9.3. AssociatesAssociates are interests which expose or entitle the group to variable proceeds as a result of the group’s involvement in these entities and which enablethe group to exercise influence over those proceeds as a result of its interest in these entities, not being subsidiaries. In general the interest held is 20%to 50% of the voting rights. Associates are recognised using the equity method. They are initially recognised at cost in the financial statements. Changesin valuation as a result of attributable results from the associates are recognised in the income statement.

Investments in associates are subject to impairment testing at such time that events or changes in circumstances indicate a possible impairment loss.The group calculates the difference between the recoverable value and the carrying amount of the associates and recognises any impairment in theincome statement.

2.10. Trade and other receivablesTrade and other receivables are initially recognised at fair value based on the payment date and subsequently at amortised cost using the effectiveinterest method (often nominal value) less impairment for doubtful receivables. Reasons for recognising a provision for doubtful receivables include thebankruptcy of a debtor, major financial problems on the part of the debtor or the passing of more than 365 days after the payment due date. Experienceshows that if a receivable has not been collected more than 365 days after the agreed payment date, it is unlikely that it will be collected. The amount ofthe provision is the difference between the carrying amount of the receivable and the present value of expected future cash flows, discounted at theoriginal effective interest rate. The carrying amount of the asset is reduced by the amount of the provision for doubtful receivables and the associatedexpenses are included in selling expenses in the income statement. If a trade receivable or other receivable is uncollectible, it is charged to the provisionfor doubtful receivables. Reversal of any amounts previously written off goes towards reducing the amount of selling expenses in the income statement.

Services supplied but not yet billed to the client are also recognised as trade receivables.

Trade receivables are not recognised in the balance sheet if they are sold to a factoring company and the contractual rights to and the cash flows fromthese receivables have been transferred. The criterion applicable in this context is the substantial transfer of risks and rewards. Factoring fees arerecognised as selling expenses.

2.11. Derivative financial instrumentsDerivative financial instruments are initially recognised in the financial statements at fair value on the date the contract is concluded and aresubsequently measured at fair value at each reporting date. Changes in the fair value of derivative financial instruments are recognised directly in theincome statement, unless hedge accounting is applied.In the event the group applies hedge accounting, its effectiveness is documented when hedging. The effectiveness of the hedge is subsequentlydetermined at regular intervals, either by comparing the critical features of the hedging instrument with the hedged position, or by comparing the fairvalue change of the hedging instrument and the hedged position.The group applies hedge accounting to interest rate derivatives entered into to hedge future cash flows from interest on its non-current borrowings.

When applying hedging the effective portion of the revaluation of the hedging instrument is directly recognised in comprehensive income. At such timeas the results of the hedged position are recognised as net finance costs in the income statement, the associated result is transferred from equity to thesame item in the income statement.The fair value of the derivative financial instrument is classified as a fixed asset or a non-current liability if the derivative financial instrument has aremaining maturity of more than 12 months, or as a current asset or liability if the remaining maturity is less than 12 months.To be able to recognise the ineffective part of the revaluation in the correct period in the income statement the group at each balance sheet daterecognises the lowest absolute amount of either of the following two valuations changes in equity:• the cumulative revaluation of the hedging instrument since the hedge relationship was indicated; and• the cumulative change in the value of future hedged cash flows insofar as it can be attributed to hedged risk.

The hedge accounting is terminated when:• the hedging instrument is sold, ended or exercised. The cumulative result on the hedging instrument that was recognised directly in equity when it

was still deemed to be an effective hedge continues to be recognised in equity until the initially hedged future transaction takes place; or• the hedge relationship no longer complies with the criteria for hedge accounting. If the hedged future transaction has yet to take place, the

associated cumulative result on the hedging instrument is recognised in equity. If the transaction will no longer take place the cumulative resultrecognised in equity is recognised in the income statement.

2.12. Cash and cash equivalentsCash and cash equivalents, including cash in hand, bank balances and readily available deposits, are recognised at nominal value. Bank overdrafts areclassified as borrowings on the balance sheet under current liabilities.



2.13. Share capitalShare capital is defined as equity attributable to equity holders of the company. Costs directly connected to the issuance of new shares are deductedfrom the proceeds recognised in equity. If the group purchases USG People N.V. shares, the amount paid, including any associated costs (after incometax), is charged to equity attributable to equity holders of the company until such time as the shares are cancelled or reissued. The amount received onthe issue of shares previously purchased, less any associated costs (after income tax), is added to the equity attributable to equity holders of thecompany.

2.14. DividendDividend is recognised as a liability for the period in which the distribution is approved by the shareholders. If shareholders are offered the optionbetween a stock dividend or a cash dividend, the stock dividend is recognised as the amount in cash which the shareholders did not elect to receive.

2.15. Non-current borrowingsBorrowings are initially recognised in the financial statements at fair value, net of transaction costs incurred, and are subsequently measured atamortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement overthe period of the borrowing using the effective interest method.

Borrowings are classified as current liabilities unless the group has the intention and an unconditional right to postpone settlement of the liability for atleast 12 months after the balance sheet date.

2.16. LeaseWhen entering into a lease contract it is assessed whether the lease classifies as a financial or operating lease. Lease contracts whereby the risks andrewards associated with ownership lie wholly or primarily with the lessor are classified as operating leases. Payments made under operating leases arecharged to the income statement for the duration of the lease using the straight-line method. Lease contracts whereby the risks and rewards associatedwith ownership actually lie with the group are classified as financial leases. The group did not have any financial lease contracts in 2014.

2.17. Income tax expenseIncome-based tax on the income for the financial year comprises current and deferred income taxes for the period under review. Income-based tax isrecognised in the income statement except where it relates to items booked in comprehensive income or directly in equity. In the latter case, theassociated tax is also recognised in comprehensive income or equity.

Current income tax consists of income-based tax on the taxable income, calculated on the basis of tax rates and legislation that has been enacted orsubstantially enacted at the balance sheet date. Management periodically monitors the positions taken when filing tax returns, taking into accountvarious legal interpretations. If necessary, liabilities are recognised based on expected tax payments.

Deferred income tax is recognised for temporary differences between the carrying amounts of assets and liabilities in the consolidated financialstatements and the amounts used for taxation purposes. However, deferred income tax liabilities are not recognised when initially recognising goodwill.Deferred income tax is calculated using tax rates and legislation that has been enacted or substantially enacted at the balance sheet date and areexpected to apply when the deferred income tax asset concerned is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised insofar as it is probable that future taxable profit will be available to offset the temporary differences andavailable tax losses.Deferred income tax assets and liabilities are offset if there is a legally enforceable right to do so and if the taxes are levied by the same authority.

2.18. Pension-related liabilities2.18.1. Defined contribution pension schemesA defined contribution scheme is a pension scheme whereby the group makes fixed contributions to a pension insurer or pension fund.Liabilities regarding contributions to pension and pension-related schemes based on defined contributions are recognised as expenses in the incomestatement in the period to which they pertain. The group has no obligations other than the payment of premiums.

2.18.2. Defined benefit pension schemesA defined benefit scheme is a pension scheme whereby the employee receives an amount in pension benefits on retirement, usually dependent onfactors such as age, years of service and remuneration.

The group’s net liability in regard to granted pension rights is determined separately for each scheme, on the basis of the present value of the liabilityunder the defined benefit pension scheme at balance sheet date, less the fair value of the plan assets (defined as the cash value of the related liability



as described in IAS 19.115). The discount factor is the return at balance sheet date on solid corporate or government bonds with a maturity similar to theterm of the group’s liabilities. The calculations are performed by certified actuaries using the projected unit credit method.

Actuarial gains and losses arising from changes in actuarial assumptions are added or charged to comprehensive income. In the event of changes in thepension scheme, unrecognised pension costs for years of service completed are recognised directly in the income statement.

2.19. Share-based remunerationThe fair value of shares granted conditionally (settled in shares) under the group’s share plan (‘Unique Share Plan’), including the group-paid wage taxrelating to these shares (settled in cash), is recognised as an expense in the income statement. Performance conditions such as revenue andprofitability and expected staff turnover are included in the estimate of the ultimate total number of shares to be granted. The estimate of the ultimatetotal number of shares to be granted is revised at balance sheet date on the basis of the performance conditions. The actual performance conditionsand staff turnover are determined at the end of the performance period and on the date that the granting becomes unconditional. Any effect of thisrevision and final determination is recognised in the income statement. The expenses are recognised on a time-weighted basis over the period to whichthe performance pertains. In the event of cancellation, either at the initiative of the staff member or of the employer, unrealised expenses pertaining tothe period between the cancellation and the end of the performance period are recognised at once as an expense in the income statement.

The expenses based on the fair value of the shares to be distributed, determined on the date of granting, is recognised directly in equity. The expensesrelating to the tax commitments for participants in the share plan payable by the group are recognised at fair value, as determined on the reporting dateand at the time of settlement. These expenses are recognised on a time-weighted basis over the period to which the performance pertains and theliability is recognised under the provisions in the financial statements.

In addition to the aforementioned share plan, the group has issued Stock Appreciation Rights (SARs).The fair value of the granted SARs (settled in cash) is recognised as an expense in the income statement during the performance period. This amount isdetermined by the fair value of the (conditionally) granted SARs. The USG People N.V. share price is a market-related condition which partly determinesthe fair value. Expected staff turnover is included in the estimate of the ultimate amount to be paid. This estimate is revised at balance sheet date.Actual staff turnover is determined on the date on which granting becomes unconditional. The effect of this revision and final determination isrecognised in the income statement. Expenses are recognised on a time-weighted basis over the conditional period of the SARs. A provision ismaintained for this purpose.

2.20. Provisions2.20.1. GeneralA provision is recognised on the balance sheet where the group has a legally enforceable or constructive obligation relating to an event in the past andwhere it is probable that settlement of that obligation will involve an outflow of funds and that the amount is estimated reliably. Where the effect of thisis material, provisions are determined by calculating the present value of estimated future cash flows using a pre-tax discount factor which reflects thecurrent market assessment of the time value of money and, if necessary, specific risks connected with the commitment. Future losses are notaccounted for.

2.20.2. Restructuring provisionsProvisions are made for restructuring if the group has finalised a detailed restructuring plan and the restructuring has been either started or announcedpublicly. The restructuring provision does not include costs relating to future operations.

2.20.3. Personnel-related provisionsThe group recognises provisions for future benefit payments to employees. These provisions take into account any future wage increases and staffturnover. The provisions include long-service awards and continuation of wage payment during extended periods of sickness.

2.21. Trade and other payablesTrade and other payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

2.22. RevenueIncome is recognised insofar as it is probable that the economic benefits will flow to the group and insofar as the income can be measured reliably. Thegroup’s income is derived from the provision of services to third parties after deduction of value added tax and discounts granted. These services mainlyconcern:• Temporary employment and secondment services: provision of temporary staff whereby hours worked at agreed rates during the financial reporting

period are recognised as revenue;• Recruitment and selection services: recruitment and selection of employees for third parties whereby revenue is booked once the service has been

completed as agreed;



• Call centre services: handling of telephone operations for third parties. The revenue consists of units (call units or conversations) relating to thereporting period and at an agreed rate;

• Reintegration services: supporting of reintegration services for third parties based on an hourly rate, for hours worked during the reporting period;• HR, IT and engineering projects: fees based on a set price are recognised as revenue based on the number of hours worked during the reporting

period compared to the estimated total number of hours needed for the project; and• Outplacement: provision of coaching to jobseekers. Revenue is determined on the basis of the amount of time to be declared during the reporting

period for each person being coached compared to the estimated total amount of time to be spent on each person being coached.

If the group is the principal in a contract and the risks and rewards lie with the group, the transactions are recognised gross in the income statement.Revenue is recognised net if the group acts as an agent, e.g. as an intermediary.

No revenue is recognised if there is major uncertainty as to whether the funds owing can be collected.

2.23. Net finance costsFinance costs comprise interest due on funds drawn, calculated using the effective interest method, negative adjustments to the value of non-currentreceivables, downward adjustments to the fair value and realised value of derivative financial instruments and interest recognised with respect toaccrued interest on contingent considerations relating to acquisitions and other liabilities.

Finance income comprises interest received on outstanding monies, positive adjustments to the value of non-current receivables and upwardadjustments to the fair value and realised value of derivative financial instruments.

2.24. Earnings per shareEarnings per share are calculated as the net income attributable to shareholders divided by the weighted average number of outstanding shares for therelevant period. Diluted earnings per share are calculated as the net income divided by the weighted average number of outstanding shares includingshares granted but not yet distributed under the Unique Share Plan. Dividend distributed in shares, whereby there is no option for a cash settlement, isrecognised as allocation of bonus shares. Earnings per share are adjusted accordingly in the comparative figures.

2.25. Basis of preparation for the statement of cash flowsThe statement of cash flows is compiled using the indirect method. The statement of cash flows distinguishes between cash flows from operating,investing and financing activities. Cash flows in foreign currencies are translated at the rate at the transaction date. Receipts and expenditure beforeincome tax are recognised as cash flows from operating activities. Interest paid and received is included under cash flow from financing activities. Cashflows arising from the acquisition or divestment of subsidiaries and associates are recognised as cash flows from investing activities, taking intoaccount any cash and cash equivalents in these interests. Dividends paid are recognised as cash flows from financing activities.

Cash and cash equivalents in the statement of cash flows equals cash and cash equivalents on the balance sheet minus bank overdrafts.

03 | FINANCIAL RISK MANAGEMENT3.1. Financial risk factorsDue to the nature of its activities, the group is exposed to various financial risks: market risks (interest rate risks and exchange rate risks), credit risksand liquidity risks. The risk management and control model supports management in identifying and analysing the different risks.

The financial and economic crisis of the past few years demands permanent attention for financial risks. The group is constantly focused on costcontrol. Specific attention is being paid to credit management, both in terms of managing credit risks and reducing the number of days salesoutstanding. Risks are further reduced by insuring most trade receivables and selling some trade receivables to factoring companies.

Group risk management focuses on minimising the potential negative effects of developments on the financial markets on the group’s performance. Ifdeemed necessary, the group uses financial instruments to hedge certain risks. The treasury department identifies and assesses financial risks andhedges them subject to approval by the Executive Board.

The group recognises the following categories of financial instruments:



31 DECEMBER 2014CARRYING

AMOUNT FAIR VALUEMAXIMUM

CREDIT RISK

Financial fixed assets 48,889 41,491 50,282Trade receivables 275,103 275,103 279,645Other receivables 3,901 3,901 3,901Cash and cash equivalents 64,691 64,691 64,691

392,584 385,186 398,519

Syndicated credit facility 149,416 150,015Subordinated credit facility 58,749 59,216Contingent considerations for acquisitions 7,685 7,685Other non-current credit facilities 2,243 2,551Bank overdrafts 4,052 4,052Trade payables 411,314 411,314Derivative financial instruments 583 583

634,042 635,416

31 DECEMBER 2013CARRYING

AMOUNT FAIR VALUEMAXIMUM

CREDIT RISK

Financial fixed assets 26,541 21,926 30,261Trade receivables 261,247 261,247 267,334Other receivables 4,286 4,286 4,286Cash and cash equivalents 63,965 63,965 63,965

356,039 351,424 365,846

Syndicated credit facility 149,042 150,034Subordinated credit facility 58,118 60,249Other non-current credit facilities 2,215 2,611Commercial paper programmes 17,466 17,466Bank overdrafts 15,018 15,018Trade payables 387,132 387,132Derivative financial instruments 46 46

629,037 632,556

The method used to estimate fair value is expanded on in note 3.2.

3.1.1. Market risksInterest rate risksFunds drawn from borrowings granted at variable interest rates expose the group to interest rate risks. On the one hand the group, as a provider ofemployment services, views variable interest rates as a natural hedge for fluctuations in operating income while, on the other hand, it wants to remainvigilant and be able to respond to any opportunities that arise.

The group regularly uses various simulated scenarios to ascertain whether existing measures to hedge interest rate risks remain adequate. The analysisfocuses on the effects of interest rate changes on income, due to the fact that the vast majority of the loans were granted at a variable interest rate, withthe risk partly hedged by derivative financial instruments (see note 21).

As the group has no significant interest-bearing assets, group income is therefore largely unaffected by interest rate fluctuations.

An increase of 50 basis points in the EURIBOR rate has a negative impact of € 1.5 million on income before taxes (2013: negative impact of € 1.6 million)and a decrease in equity of € 0.8 million (2013: € 0.8 million), taking hedging measures into account and with all other factors being equal. A decrease of50 basis points in the EURIBOR rate has a positive impact of € 1.5 million (2013: positive impact of € 1.6 million) on income before taxes and an increasein equity of € 0.8 million (2013: € 0.8 million), taking hedging measures into account and with all other factors being equal.



Currency exchange risksIn view of the fact that group activities in currencies other than the euro are very limited, exchange rate risks are not hedged. No borrowings are issued ina currency other than the euro.

3.1.2. Credit risksCredit risks arise from trade receivables, cash and cash equivalents, financial derivatives and deposits held at banks.

Trade receivables are generally insured by insurance companies (with at least an A rating S&P, Moody’s, Fitch or A.M. Best). Receivables fromgovernments and financial institutions in the Netherlands are not insured. Where a trade receivable is not insured, the client’s creditworthiness isassessed prior to the service being supplied, taking past experiences and other considerations into account. Credit limits are assigned to clients basedon information supplied by insurance companies or internal guidelines approved by the Executive Board. Credit limits are assessed regularly.

The treasury department maintains contacts with insurance companies and monitors the application of the main credit procedures. The group has aninformation system to closely track the creditworthiness of its customers. The system complements the services provided by the insurance company,making the credit risks more transparent. It combines the group’s own information, purchased business information and credit reports issued by thecredit insurer. Good results are achieved through periodical discussions with the insurance company and internal monitoring of the credit risks. Creditmeetings are held monthly in all countries to discuss important aspects of the trade receivables. The Executive Board is informed regularly ondevelopments in its credit management policy. Note 16 ‘Trade and other receivables’ provides a further analysis of the credit risks on trade receivables.

The group only uses the banks which issued the syndicated loan for financial receivables such as cash and cash equivalents, derivative financialinstruments and deposits.

3.1.3. Liquidity risksThe objective of liquidity risk management is to safeguard the continuity of the group, to ensure returns for shareholders and rewards for otherstakeholders and to maintain the best possible capital structure with a view to reducing the costs of capital. To maintain or adjust the capital structurethe group can adjust dividend payments, repay share capital, issue new shares or sell assets to reduce its liabilities. Working capital is monitored andthe investment policy is aimed at generating positive cash flows from earnings.

The treasury department makes sure that there are sufficient cash and cash equivalents and credit facilities available to manage liquidity risks. Thegroup’s liquidity is monitored based on forecasts and strategic plans. In addition, the group’s liquidity is safeguarded through compliance with the termsand conditions of the syndicated and subordinated credit facility and other borrowings. The Executive Board uses cash flow reports including forecaststo assess the liquidity risk.

The principal conditions of the syndicated credit facility and the subordinated credit facility concern the senior leverage ratio (which needed to be keptequal to or below 3.0) and the interest coverage ratio (equal to or above 3.5). An additional condition under the subordinated credit facility relates to thetotal leverage ratio (equal to or below 3.75 from 23 September 2013 up to and including 31 December 2014; equal to or below 3.5 from 1 January 2015 upto and including 30 June 2015; equal to or below 3.25 from 1 July 2015 up to and including 31 December 2015; and equal to or below 3.0 from 1 January2016 up to and including 31 December 2016). Both facilities stipulate a maximum on the value of acquisitions per year and during the entire term. Themethod of calculating ratios is defined in the covenant with the banks. The adjustments resulting from the terms and conditions of the covenant in thecalculation of the interest cover ratio, the senior leverage ratio and the total leverage ratio concern adjustments ensuing from the agreements made withthe banks in the covenant with respect to the valuation of companies consolidated and deconsolidated in the course of the year, non-operatingexpenses, the unrealised valuation result on derivatives, extraordinary adjustments with regard to defined benefit pension schemes and the impact ofthe application of the revised IAS 19 and the revised IFRS 3 on investments in subsidiaries. The ratios are reported to the banks on a quarterly basis.

The group targets a long-term debt position with a total leverage ratio equal to or below 1.0.

The unused part of the syndicated credit facility was € 267 million at the end of 2014 (2013: € 249 million). Taking into account the senior leverage ratioand the total leverage ratio, the unused part was € 190 million and € 181 million, respectively.

Total and senior leverage ratioThe following table specifies the total and senior leverage ratios as at 31 December. The calculation for 2013 includes operating income, depreciation,amortisation and impairments for the discontinued business operations. The calculations as at 31 December were as follows:



2014 2013

Bank overdrafts and borrowings 222,145 241,859Minus: cash and cash equivalents -64,691 -63,965Plus: adjustments in accordance with terms and conditions of covenant 11,107 9,423Total net debt position in accordance with terms and conditions of covenant 168,561 187,317Minus: subordinated credit facility -58,749 -58,118Total net senior debt position in accordance with terms and conditions of covenant 109,812 129,199

Operating income 67,173 41,314Plus: depreciation, amortisation and impairments 25,553 33,162Plus: adjustments relating to divested and discontinued activities - -25,848Plus: adjustments in accordance with terms and conditions of covenant 7,252 33,375EBITDA 99,978 82,003

Total leverage ratio (net debt position / EBITDA) 1.7 2.3Senior leverage ratio (net senior debt position / EBITDA) 1.1 1.6

The total leverage ratio in recent quarters was as follows:

COVENANT ACTUAL

30 September 2013 ≤ 3.75 2.931 December 2013 ≤ 3.75 2.331 March 2014 ≤ 3.75 2.230 June 2014 ≤ 3.75 2.330 September 2014 ≤ 3.75 2.031 December 2014 ≤ 3.75 1.7

The senior leverage ratio in recent quarters was as follows:

COVENANT ACTUAL

31 March 2013 ≤ 3.0 2.030 June 2013 ≤ 3.0 2.530 September 2013 ≤ 3.0 1.931 December 2013 ≤ 3.0 1.631 March 2014 ≤ 3.0 1.630 June 2014 ≤ 3.0 1.730 September 2014 ≤ 3.0 1.431 December 2014 ≤ 3.0 1.1

Interest cover ratioThe method of calculating the interest cover ratio as at 31 December is specified below. The calculation for 2013 includes the net finance costs of thediscontinued business operations.

2014 2013

Net finance costs 9,539 9,582Minus: amortisation of costs of syndicated and subordinated credit facility -1,437 -1,942Minus: adjustments in accordance with terms and conditions of covenant -219 6,452Interest 7,883 14,092

Interest cover ratio (EBITDA / interest) 12.7 5.8



The evolution of the interest cover ratio in recent quarters was as follows:

COVENANT ACTUAL

31 March 2013 ≥ 3.5 5.630 June 2013 ≥ 3.5 4.930 September 2013 ≥ 3.5 4.631 December 2013 ≥ 3.5 5.831 March 2014 ≥ 3.5 6.930 June 2014 ≥ 3.5 8.530 September 2014 ≥ 3.5 11.431 December 2014 ≥ 3.5 12.7

Conditions and repayment termsThe table below states the repayment terms of the group’s financial commitments. The amounts listed in the table are contractually agreed cash flowswhich have not been discounted. The term of the syndicated and subordinated credit facility ends in 2016. USG People consults with its banks on aregular basis to achieve timely refinancing.

Conditions and repayment terms at end-2014 based on the nominal value including interest due:

TOTAL < 3 MTH 3-6 MTH 6-12 MTH 1-2 YEARS 2-5 YEARS > 5 YEARS

Syndicated credit facility 152,891 450 455 921 151,065 - -Subordinated credit facility 67,905 973 984 1,990 63,958 - -Contingent considerations for acquisitions 8,031 75 3,347 150 - 4,459 -Other credit facilities 2,647 6 - 60 1,590 - 991Bank overdrafts and borrowings 4,052 4,052 - - - - -Trade and other payables 411,316 411,316 - - - - -Derivative financial instruments 474 58 59 123 234 - -

647,316 416,930 4,845 3,244 216,847 4,459 991

Conditions and repayment terms at end-2013 based on the nominal value including interest due:

TOTAL < 3 MTH 3-6 MTH 6-12 MTH 1-2 YEARS 2-5 YEARS > 5 YEARS

Syndicated credit facility 155,487 524 530 1,071 2,124 151,238 -Subordinated credit facility 71,201 1,004 1,015 2,053 4,072 63,057 -Other credit facilities 2,732 148 - - 118 1,759 707Bank overdrafts and borrowings 15,018 15,018 - - - - -Commercial paper programmes 17,466 17,466 - - - - -Trade and other payables 387,132 387,132 - - - - -Derivative financial instruments 22 35 37 70 54 -174 -

649,058 421,327 1,582 3,194 6,368 215,880 707

3.2. Estimating fair valueThe group implements the following hierarchy for the disclosure of financial instruments recognised at fair value:• Level 1: market prices for financial instruments traded on an active market;• Level 2: information other than market prices for the fair value of financial instruments that are not traded on an active market. The group uses

various methods and makes assumptions based on market conditions at the balance sheet date. For non-current debt it uses market prices ormarket prices given by traders for comparable instruments; and

• Level 3: other methods, including estimated present value calculations, are used to determine the valuation of other financial instruments.

Only derivative financial instruments (note 21) are carried at fair value in the balance sheet (level 2 and level 3).



The principal methods and assumptions used to estimate the fair values as stated in 3.1. are summarised below:• Financial fixed assets: the fair value is calculated based on the expected future cash inflows arising from repayments and interest payments. The fair

value of non-interest bearing guarantee deposits with no fixed maturity is equal to nil. The fair value of interest-bearing guarantee deposits with afixed maturity is estimated using the discounted cash flow method (level 2).

• Trade receivables, trade payables, other receivables and payables, cash and cash equivalents: for current receivables and payables with a maturityof less than one year the fair value is equal to the nominal value. The fair value of other receivables and payables is calculated using the discountedcash flow method (level 2)

• Interest-bearing borrowings, debts and contingent considerations for acquisitions: the fair value is calculated using the present value of expectedfuture cash outflows arising from repayments and interest payments (level 2).

• Derivatives: the fair value of derivatives is determined using reports from the banks with whom the derivatives have been agreed. The value ofderivatives is determined by the banks using Black-Scholes for i-rates (level 2).

The group discounts its financial instruments using the effective return relevant to its risk profile and the maturity of the financial instrument at thebalance sheet date. The fair value is determined by discounting the relevant cash flows using a market discount rate applicable to comparableinstruments. The following interest rates applied:

2014 2013

Non-current receivables 4.0% 4.2%Non-current borrowings 1.2% 1.4%Subordinated loans 6.6% 6.8%

04 | ACQUISITIONS AND DIVESTMENTSThe acquisitions and divestments of subsidiaries and associates are described below.

4.1. AcquisitionsAcquisitions in 2014: subsidiariesThe following acquisitions in subsidiaries took place:

SUBSIDIARY ACQUIRED % OF SHARES DATE OF ACQUISITION

Netwerven B.V. 51% 1 October 2014Connecting Expertise NV 51% 9 December 2014

Netwerven B.V. advises and helps build and deploy recruitment strategies and optimise recruitment processes. Connecting Expertise NV is an onlinesoftware services provider of advanced Vendor Management System solutions including an online market place. The financial information providedbelow is combined and reflects both acquisitions. Agreement was reached with the owners of the companies regarding simultaneous call and putoptions or a deferred acquisition of the remaining 49% of the shares. These transactions will take place in 2018 and 2019, respectively. Accordingly therisks and rights relating to the companies, with the exception of dividends still payable before transfer of the remaining shares, are borne by the group.The non-controlling interests equal the stake of the non-controlling shareholders in net income.

The consideration transferred for both acquisitions was € 9,139 in total, of which € 5,209 is contingent. The contingent considerations for acquisitionsdepend on future results achieved and are recognised at fair value according to level 3. They partly consist of earn-out commitments of € 1,275 relatingto the acquisition of 51% of the shares. The remaining amount of € 3,934 relates to the call and put option respectively the deferred acquisition. During2014 the earn-out commitment was increased by € 1,392 as a result of a revaluation based on results achieved in 2014. This adjustment is recognised inthe income statement under finance costs.



The valuation of the assets and liabilities from acquisition as at the date of acquisition was as follows:

FAIR VALUE 2014

Trademarks 776Customer relationships 2,546Software 2,052Property, plant and equipment 62Trade and other receivables 1,799Cash and cash equivalents 208Deferred income tax liabilities -1,541Current income tax liabilities -125Trade and other payables -1,459

Non-controlling interests -92Acquired assets and liabilities 4,226

Goodwill 4,913Consideration transferred 9,139

The intangible assets identified separately relate to trademarks, customer relationships and software. The fair value of the trademarks is based on theexpected royalty percentage payable by a third party for use of the brand (level 3). The fair value of the customer relationships and software isdetermined based on the expected discounted cash flows achieved with the asset (level 3). The fair value of the other assets and liabilities is equal tothe carrying value. Trade and other receivables mainly consist of trade receivables and were deemed to be fully recoverable as from the date on whichthey were acquired.

The goodwill is attributable to the possibilities that the acquisitions offer the group to expand its online HR services strategy and to the possibilities theyoffer to increase their added value for their clients. The goodwill is not deductible for tax purposes.

The reconciliation of the outflow of cash and cash equivalents in the statement of cash flows is as follows:

2014

Consideration transferred 9,139Minus: contingent consideration -5,209Consideration transferred paid 3,930Minus: cash and cash equivalents in acquired subsidiary -208OUTFLOW OF CASH AND CASH EQUIVALENTS AS A RESULT OF ACQUISITION 3,722

In 2014 both acquisitions contributed € 1,431 to group revenue and € 390 to group net income. The contribution would have been € 4,461 to revenue and€ 536 to net income if the acquisitions had taken place on 1 January 2014.

The transaction fees for the acquisitions amount to € 151 and were recognised in the income statement under general and administrative expenses.

Both acquisitions are recognised in de operating segment Online Business Solutions.

Acquisitions in 2014: associateThe following acquisition in an associate took place:

ASSOCIATED SUBSIDIARY ACQUIRED % OF SHARES DATE OF ACQUISITION

BC Beheer B.V. 20% 31 October 2014

BC Beheer B.V. (Blue Carpet) is a Dutch company that helps employers and regional and sector-wide HR platforms develop intelligent HR communitiesfor recruitment and selection, the organisation of a flexible shell, the exchange of knowledge and talent, mobility, talent pools and talent development.The acquisition price was € 3,400 and is recognised as financial fixed assets (see note 15).



Furthermore a simultaneous call and put option was agreed with a fellow shareholder for the acquisition of another 20% of the shares. These can beexercised for a period of a year as from 31 October 2017. The option is not recognised as a liability from a contingent consideration on the balance sheetas it concerns an associate. The option qualifies as a derivative financial instrument and had a fair value of - € 108 (level 3) at the end of 2014, which isrecognised on the balance sheet accordingly.

Acquisitions in 2013The following acquisition in a subsidiary took place:

SUBSIDIARY ACQUIRED % OF SHARES DATE OF ACQUISITION

Adver-Online B.V. 51% 24 April 2013

Adver-Online B.V. is a company established in 2005 that provides advisory services and services in the field of online recruitment and selection, as wellas online HR services. One of the objectives of Adver-Online B.V. is to become an online temporary staffing organisation in the European market with itsHR Office online platform.

The consideration transferred was € 4,711. This fixed acquisition price is accompanied by a variable consideration of up to € 755. The amount of thisconsideration depends on Adver-Online B.V. achieving targets for future financial results. In 2014 the earn-out commitment increased by the maximumamount of € 755 as a result of a revaluation based on results achieved. This adjustment is recognised in the income statement under finance costs.

The valuation of the assets and liabilities from the acquisition as at the date of acquisition was as follows:

FAIR VALUE 2013

Trademark 469Customer relationships 914Software 580Financial fixed assets 3Property, plant and equipment 29Trade and other receivables 1,046Cash and cash equivalents 502Non-current borrowings -225Deferred income tax liabilities -346Current income tax liabilities -15Trade and other payables -1,355

Non-controlling interest -785Acquired assets and liabilities 817

Goodwill 3,894Consideration transferred 4,711

The intangible assets identified separately relate to the trademark, customer relationships and software. The fair value of the trademark is based on theexpected royalty percentage payable by a third party for use of the brand (level 3). The fair value of the customer relationships and software isdetermined based on the expected discounted cash flows achieved with the asset (level 3). The fair value of the other assets and liabilities is equal tothe carrying value. Trade and other receivables mainly consist of trade receivables and were deemed to be fully recoverable as from the date on whichthey were acquired.

The € 785 non-controlling interest is based on the proportional share in the fair value of the identifiable assets and liabilities.

The goodwill is attributable to the possibilities that the acquisition offers the group to expand its online HR services strategy and it is therefore anaddition to the existing services portfolio. The goodwill is not deductible for tax purposes.



The reconciliation of the outflow of cash and cash equivalents in the statement of cash flows is as follows:

2013

Consideration transferred paid 4,711Minus: cash and cash equivalents in acquired subsidiary -502OUTFLOW OF CASH AND CASH EQUIVALENTS AS A RESULT OF ACQUISITION 4,209

In 2013 Adver-Online B.V. contributed € 2,583 to group revenue and € 62 to group net income. The contribution would have been € 4,032 to revenue and€ 112 to net income if the acquisition had taken place on 1 January 2013.

The transaction fees for the acquisition amount to € 10 and were recognised in the income statement under general and administrative expenses.

The acquisition is recognised in the operating segment Online Business Solutions with effect from 2014.

4.2. DivestmentsDivestments in 2014No subsidiaries were divested in 2014.

Divestments in 2013The group divested the subsidiaries belonging to USG Energy and the subsidiaries belonging to the General Staffing activities in Spain, Italy, Austria,Switzerland, Poland and Luxembourg. The financial information of these subsidiaries is included in the income statement for 2013 for the period duringwhich the group had control over the respective subsidiaries.

The divestment of the General Staffing activities is recognised as a discontinued operation in accordance with IFRS 5. Net income achieved in the firsthalf of 2013 is recognised in the income statement as net income from discontinued operations.

4.2.1. Net income from divested activitiesThe breakdown of net income from divested activities in the income statement is as follows:

2013

Net income on divestment of USG Energy 28,688NET INCOME FROM DIVESTMENT 28,688

USG EnergyIn March 2013 the group sold the subsidiaries of USG Energy.

The reconciliation of the amount of the inflow of cash and cash equivalents in the statement of cash flows is as follows:

2013

Inflow of cash and cash equivalents as a result of divested subsidiaries 80,290Cash and cash equivalents in divested subsidiaries -10,782DIVESTMENT OF SUBSIDIARIES IN STATEMENT OF CASH FLOWS 69,508



The assets and liabilities connected with the divestment are as follows:

2013

Property, plant and equipment 636Goodwill 38,223Other intangible assets 53Trade and other receivables 12,904Cash and cash equivalents 10,782Provisions -638Trade and other receivables -9,797Current income tax liabilities -644Divested assets and liabilities 51,519

Consideration received 80,290Divested assets and liabilities -51,519Realisation of currency translation differences -83Net income from divestment 28,688

4.2.2. Net income from discontinued activitiesThe breakdown of the net income from discontinued operations is recognised in the income statement as follows:

2014 2013

Net income from divestment of General Staffing activities -1,751 -39,350Net income from General Staffing activities - 1,060NET INCOME FROM DISCONTINUED OPERATIONS -1,751 -38,290

Net income for 2014 concerns mainly additional costs related to guarantees issued. Please also refer to note 23 for further information.

General Staffing activitiesIn June 2013 the group divested the subsidiaries belonging to the General Staffing activities in Spain, Italy, Austria, Switzerland, Poland andLuxembourg.The reconciliation of the amount of the inflow of cash and cash equivalents in the statement of cash flows is as follows:

2013

Inflow of cash and cash equivalents as a result of divested subsidiaries 26,584Cash and cash equivalents in divested subsidiaries -14,649DIVESTMENT OF SUBSIDIARIES IN STATEMENT OF CASH FLOWS 11,935



Assets and liabilities resulting from the divestment are as follows:

2013

Property, plant and equipment 2,078Goodwill 7,450Other intangible assets 1,960Financial fixed assets 284Deferred income tax assets 17,224Trade and other receivables 99,302Cash and cash equivalents 14,649Borrowings -2,752Pension-related liabilities -625Provisions -640Trade and other payables -62,416Current income tax liabilities -860Divested assets and liabilities 75,654

Consideration received 26,584Divested assets and liabilities -75,654Income tax as a result of divestment transaction 14,080Costs of guarantee scheme -3,940Realisation of currency translation differences -420Net income from divestment of General Staffing activities -39,350

Costs of guarantee scheme relates to a provision for the possible future outflow of funds as a result of the buyer making use of the guarantee schemearising from the divestment. Please also refer to note 23.

The breakdown of net income from the discontinued General Staffing activities is as follows:

2013

Revenue 209,704Expenses -207,246Result before income tax 2,458Income tax expense -1,398Net income from General Staffing activities 1,060

05 | OPERATING SEGMENTSThe organisation is structured according to the product-market combinations within which the group operates. The monthly information reported to theExecutive Board, as chief operating decision maker, is in line with this. Group results are divided into the segments (General Staffing, Specialist Staffing,Professionals and Online Business Solutions) and are then further analysed by country. The Executive Board bases its decisions on this information. In2014 the Online Business Solutions segment was set up and Adver-Online B.V. was transferred from Professionals The Netherlands to Online BusinessSolutions. The comparative figures have been restated accordingly.

The Executive Board evaluates the segments mainly on their revenue and EBITA. Net finance costs are not attributed to the segments due to the factthat cash resources are managed by the central Treasury department. The breakdown of the net finance costs and net income are therefore notprovided. A number of operating segments have been incorporated in ‘other’ due to their size. Revenue between operating segments is not material andis therefore not stated separately.



5.1. Segmentation of income

2014 REVENUE DEPRECIATION EBITA

AMORTISATIONAND

IMPAIRMENTOPERATING

INCOME

The Netherlands 536,845 -5,701 17,484 -277 17,207Belgium 388,336 -3,351 13,435 - 13,435France 482,193 -897 23,153 - 23,153General Staffing 1,407,374 -9,949 54,072 -277 53,795

The Netherlands 372,485 -4,720 15,736 - 15,736Belgium 188,119 -1,457 18,723 -208 18,515Germany 224,956 -621 2,501 -4,284 -1,783Other 7,237 -80 -3,052 -27 -3,079Specialist Staffing 792,797 -6,878 33,908 -4,519 29,389

The Netherlands 95,304 -1,055 4,385 -904 3,481Belgium 47,766 -357 473 - 473Other 4,657 -36 -3,472 -287 -3,759Professionals 147,727 -1,448 1,386 -1,191 195

Online Business Solutions 7,134 -320 1,375 -384 991

Corporate - -587 -17,197 - -17,197TOTAL 2,355,032 -19,182 73,544 -6,371 67,173

2013 REVENUE DEPRECIATION EBITA

AMORTISATIONAND

IMPAIRMENTOPERATING

INCOME

The Netherlands 541,773 -5,463 5,849 -311 5,538Belgium 352,478 -3,224 10,416 -706 9,710France 459,691 -921 14,272 - 14,272General Staffing 1,353,942 -9,608 30,537 -1,017 29,520

The Netherlands 336,595 -4,102 6,199 -2,777 3,422Belgium 182,346 -1,467 17,018 -433 16,585Germany 221,579 -723 9,273 -6,373 2,900Other 8,621 -408 -4,161 -2 -4,163Specialist Staffing 749,141 -6,700 28,329 -9,585 18,744

The Netherlands 111,070 -1,249 109 -2,507 -2,398Belgium 50,042 -392 -507 -662 -1,169Other 3,253 -27 -3,188 -287 -3,475Professionals 164,365 -1,668 -3,586 -3,456 -7,042

Online Business Solutions 2,583 -147 41 -186 -145

Corporate - -794 -28,465 - -28,465TOTAL 2,270,031 -18,917 26,856 -14,244 12,612

The various types of services distinguished, as described in the accounting policies in note 2.22., are provided in every segment. No clients have amaterial share of revenue.



The reconciliation of results per operating segment to net income from continuing operations is as follows:

2014 2013

Operating result in segmentation of income 67,173 12,612Net income from divestments - 28,688Operating income 67,173 41,300Net finance costs -9,539 -9,582Share of income of associates -19 14Income tax expense -29,501 -19,513NET INCOME FROM CONTINUING OPERATIONS 28,114 12,219

5.2. Segmentation of balance sheet

31 DECEMBER 2014PROPERTY, PLANT

AND EQUIPMENT GOODWILLINTANGIBLE

ASSETSNET WORKING

CAPITAL TOTAL

The Netherlands 3,545 102,851 18,231 -10,605 114,022Belgium 2,319 141,500 7,902 -30,288 121,433France 2,018 - 755 -55,442 -52,669General Staffing 7,882 244,351 26,888 -96,335 182,786

The Netherlands 3,604 217,184 11,380 -13,119 219,049Belgium 1,052 36,716 3,854 -13,044 28,578Germany 1,634 96,983 1,956 -9,332 91,241Other 147 - 383 487 1,017Specialist Staffing 6,437 350,883 17,573 -35,008 339,885

The Netherlands 900 66,598 4,883 1,731 74,112Belgium 163 11,389 974 -843 11,683Other 59 1,056 154 -138 1,131Professionals 1,122 79,043 6,011 750 86,926

Online Business Solutions 129 8,807 6,813 468 16,217

Corporate 687 - 710 -388 1,009TOTAL 16,257 683,084 57,995 -130,513 626,823



31 DECEMBER 2013PROPERTY, PLANT

AND EQUIPMENT GOODWILLINTANGIBLE

ASSETSNET WORKING

CAPITAL TOTAL

The Netherlands 2,980 102,851 21,997 -8,171 119,657Belgium 2,439 141,500 5,301 -20,128 129,112France 2,000 - 678 -50,025 -47,347General Staffing 7,419 244,351 27,976 -78,324 201,422

The Netherlands 4,078 217,184 12,242 -9,402 224,102Belgium 1,026 36,717 2,937 -12,462 28,218Germany 1,952 96,983 6,012 -11,384 93,563Other 238 - 32 332 602Specialist Staffing 7,294 350,884 21,223 -32,916 346,485

The Netherlands 630 66,598 6,914 1,923 76,065Belgium 177 11,389 760 -2,421 9,905Other 73 1,055 440 -255 1,313Professionals 880 79,042 8,114 -753 87,283

Online Business Solutions 28 3,894 1,753 -364 5,311

Corporate 708 - 908 -3,740 -2,124TOTAL 16,329 678,171 59,974 -116,097 638,377

The reconciliation of assets per operating segment to the balance sheet is as follows:

2014 2013

Property, plant and equipment 16,257 16,329Goodwill 683,084 678,171Intangible assets 57,995 59,974Trade and other receivables 294,383 279,903Trade and other payables -424,896 -396,000TOTAL 626,823 638,377

06 | COST OF SALESThe breakdown of the cost of sales is as follows:

2014 2013

Wage and salary costs 1,454,407 1,385,125Social security contributions 314,058 307,547Premiums for defined contribution pension schemes 11,815 13,431Other costs 82,652 76,985TOTAL 1,862,932 1,783,088

07 | OPERATING EXPENSESThe breakdown of the operating expenses is as follows:

2014 2013

Employee costs 300,130 318,191Depreciation, amortisation and impairments 25,553 33,161Other expenses 99,244 122,979TOTAL 424,927 474,331



The breakdown of employee costs is as follows:

2014 2013

Wages and salaries of indirect employees 208,034 224,543Social security contributions 45,815 46,695Premiums for defined contribution pension schemes 4,413 4,785Costs of defined benefit pension schemes 876 1,920Costs of share-based payments 404 378Other employee expenses 40,588 39,870TOTAL 300,130 318,191

The number of indirect employees (FTE) totals:

2014 2013

Number as at 31 December 4,918 4,793Average throughout the financial year 4,821 5,057

08 | FINANCE COSTS2014 2013

Interest on borrowings 7,695 6,348Payments on derivate financial instruments 165 6,230Commitment and utilisation fee on syndicated credit facility 1,309 1,789Revaluation of French government loan - 996Valuation changes relating to contingent considerations for acquisitions 2,252 -Other interest expenses 854 990Currency translation differences - 138TOTAL 12,275 16,491

More information on the determination of finance costs can be found in note 20. The valuation changes to contingent considerations relating toacquisitions is the result of a reconsideration of the earn-outs which are to be paid for former investments in subsidiaries. The other interest expensesrelate to interest on current accounts held with banks and the discounting of receivables resulting from the CICE tax measure that are recognised asfinancial fixed assets.

09 | FINANCE INCOME2014 2013

Interest received 35 226Unrealised result on derivative financial instruments - 6,228Revaluation of French government loan 2,684 -Valuation changes relating to contingent considerations for acquisitions - 455Currency translation differences 17 -TOTAL 2,736 6,909

The revaluation of the loan issued to the French government relates to the change in the market interest rate against which the cash flows from this loanare discounted. The interest received on this loan is lower than the market interest rate. The unrealised result on financial derivatives from 2013 relatesto the revaluation of interest rate derivatives.



10 | SHARE OF INCOME OF ASSOCIATES2014 2013

Share in income of associates -19 14TOTAL -19 14

In 2014 the group acquired one non-controlling interest (note 4).

11 | INCOME TAX EXPENSE2014 2013

Current taxes 18,498 17,028Deferred taxes 11,003 2,485CHARGE IN FINANCIAL STATEMENT FROM CONTINUING OPERATIONS 29,501 19,513

Taxation on group profit before taxes differs as follows from the charge as calculated using the weighted average nominal tax rate for the group:

2014 2014 % 2013 2013 %

Income before tax 57,615 31,732

Taxation based on weighted average tax rates 20,834 36.2% 12,265 38.7%Non tax-deductible costs 4,454 7.7% 4,267 13.4%Tax-deductible tax on added value -2,502 -4.3% -2,194 -6.9%Tax-exempt revenue -11,602 -20.1% -9,241 -29.1%Additional unrecognised losses 14,545 25.2% 14,765 46.5%Unrecognised temporary differences 1,964 3.4% - -Reassessed income tax charge from previous years -623 -1.1% 367 1.2%Tax on added value 6,595 11.4% 6,456 20.3%Settlement of loss on subsidiary -4,164 -7.2% - -Net income from divestments - - -7,172 -22.6%CHARGE IN FINANCIAL STATEMENT FROM CONTINUING OPERATIONS 29,501 51.2% 19,513 61.5%

The weighted average nominal tax rate was 36.2% (2013: 38.7%). This rate is composed of the results of subsidiaries in the various countries.

In France a tax is charged on added value which is recognised as income tax. This tax is deductible for the determination of the result for tax purposesand is recognised in the above table as tax-deductible tax on added value. Tax-exempt revenue mainly relates to the notional interest allowance inBelgium and the CICE tax measure in France. The additional unrecognised losses mainly relate to the impairment of deferred tax assets in Germany,France, Belgium and Switzerland. In the Netherlands a deferred tax asset is recognised with respect to the settlement of a loss on a subsidiary on futureresults for tax purposes.



Deferred income tax assets and liabilities are specified according to maturity as follows:

2014 2013

Deferred tax asset:- Deferred tax asset for settlement after 12 months 41,593 51,013- Deferred tax asset for settlement within 12 months 8,284 11,494

49,877 62,507

Deferred income tax liability:- Deferred tax liability for settlement after 12 months 5,233 5,466- Deferred tax liability for settlement within 12 months 2,100 2,281

7,333 7,747NET DEFERRED ASSET 42,544 54,760

Changes in deferred income taxes are as follows:

CHANGE IN DEFERRED TAXES 2014 2013

Balance as at 1 January 54,760 60,957To income statement as continuing operations -11,003 -2,497To income statement as discontinued operations 341 13,948Remeasurement of pension liability in comprehensive income -120 -90Cash flow hedge in comprehensive income 107 12Acquisition of subsidiaries -1,541 -346Divestment of subsidiaries - -17,224BALANCE AS AT 31 DECEMBER 42,544 54,760

Deferred income tax assets and liabilities consists of:

DEFERRED TAX ASSETS 2014 2013

Tax losses carried forward 38,622 50,238Other 11,255 12,269BALANCE AS AT 31 DECEMBER 49,877 62,507

The asset connected with tax losses carried forward relates mainly to Belgium, the Netherlands and Germany. The other deferred tax asset itemincludes temporary differences for a tax loss relating to a subsidiary, tax-deductible goodwill and restructuring provisions. The decrease in deferred taxassets is mainly due to an impairment in Germany.

Based on earnings prognoses for the coming years, the Executive Board has made an estimation of the probability of these assets being used in thecoming years, taking into account country-specific recoverability possibilities. The prognoses are in line with the assumptions used in impairmenttesting (note 13), supplemented with specific elements for the determination of the result for tax purposes.

DEFERRED TAX LIABILITY 2014 2013

Intangible assets 6,700 6,611Other 633 1,136BALANCE AS AT 31 DECEMBER 7,333 7,747

The other deferred tax liabilities item includes temporary differences relating to capitalised costs of the syndicated and subordinated credit facility.



Changes in unrecognised deferred tax assets resulting from losses carried forward are as follows:

UNRECOGNISED DEFERRED INCOME TAX ASSETS 2014 2013

Balance as at 1 January 18,912 19,202Additional unrecognised deferred tax assets 14,545 14,765Permanently unrecognisable losses - -2,890Divestment of subsidiaries - -12,165BALANCE AS AT 31 DECEMBER 33,457 18,912

Additional taxes on unrecognised losses comprises losses that are not expected to be offset in the foreseeable future (ten years). Of these unrecognisedlosses, an amount of € 28,020 (2013: 14,725) has an unlimited settlement period with future taxable profits.

The measurement of deferred taxes is based on growth and profitability assumptions which may differ from actual results. A 10% deviation from therevenue projections for 2015 and therefore also for revenue in the years that follow can result in a € 6.3 million drop or a € 1.3 million rise in deferredincome taxes. A 0.5% decrease or increase in projections for EBITA as a percentage of revenue can result in a € 6.6 million drop or a € 1.2 million rise indeferred income taxes.



12 | PROPERTY, PLANT AND EQUIPMENT

BUILDINGSAND LAND

FURNISHINGSAND

CONVERSIONS

COMPUTERAND

PERIPHERALSOTHER FIXED

ASSETS TOTAL

BREAKDOWN OF CARRYINGAMOUNT AS AT 1 JANUARY 2013Cost 804 76,499 22,345 42,742 142,390Cumulative depreciation and impairments -38 -62,409 -17,962 -35,112 -115,521Carrying amount as at 1 January 2013 766 14,090 4,383 7,630 26,869

CHANGES IN CARRYING AMOUNTAcquisition of subsidiaries - 1 16 12 29Investments - 1,622 1,611 542 3,775Disposals - -840 -189 -416 -1,445Depreciation -30 -5,366 -2,207 -2,581 -10,184Currency translation differences - - - -1 -1Disposals relating to divestments of subsidiaries - -1,560 -259 -895 -2,714Balance -30 -6,143 -1,028 -3,339 -10,540

BREAKDOWN OF CARRYINGAMOUNT AS AT 31 DECEMBER 2013Cost 804 56,944 14,761 30,437 102,946Cumulative depreciation and impairments -68 -48,997 -11,406 -26,146 -86,617Carrying amount as at 31 December 2013 736 7,947 3,355 4,291 16,329

CHANGES IN CARRYING AMOUNTAcquisition of subsidiaries - - 2 60 62Investments - 3,846 1,343 1,309 6,498Disposals - -218 -52 -188 -458Depreciation -31 -2,986 -1,556 -1,602 -6,175Currency translation differences - - - 1 1Balance -31 642 -263 -420 -72

BREAKDOWN OF CARRYINGAMOUNT AS AT 31 DECEMBER 2014Cost 804 52,076 13,537 25,578 91,995Cumulative depreciation and impairments -99 -43,487 -10,445 -21,707 -75,738CARRYING AMOUNT AS AT 31 DECEMBER 2014 705 8,589 3,092 3,871 16,257

An amount of € 2,351 (2013: € 4,757) arising from the depreciation of property, plant and equipment has been included in the general and administrativeexpenses. The remainder has been included in the selling expenses.



13 | GOODWILL2014 2013

Cost 875,077 1,014,103Impairments -196,906 -294,153Carrying amount as at 1 January 678,171 719,950

Acquisition of subsidiaries 4,913 3,894Disposals relating to divestments of subsidiaries - -45,673Balance 4,913 -41,779

Carrying amount as at 31 December 683,084 678,171

Cost 879,990 875,077Impairments -196,906 -196,906CARRYING AMOUNT AS AT 31 DECEMBER 683,084 678,171

The acquisition and divestments of subsidiaries are specified in more detail in note 4.

Goodwill is allocated to groups of cash-generating units. This allocation is based on the segment-focused reporting structure used by the ExecutiveBoard to monitor goodwill in 2014:

2014 2013

General Staffing The Netherlands 102,851 102,851General Staffing Belgium 141,500 141,500Specialist Staffing The Netherlands 211,335 211,335Specialist Staffing Belgium 21,893 21,893Specialist Staffing Germany 96,983 96,983Professionals The Netherlands 66,598 66,598Professionals Belgium 11,389 11,389Professionals France 1,056 1,056Secretary Plus The Netherlands 5,849 5,849Secretary Plus Belgium 14,823 14,823Online Business Solutions The Netherlands 7,104 3,894Online Business Solutions Belgium 1,703 -

683,084 678,171

In 2014 USG People made a number of strategic acquisitions and acquired interests in technology-driven and online HR services providers, part of thecash-generating unit Online Business Solutions that was established in 2014. The acquired interest in Adver-Online in 2013 was transferred from thecash-generating unit Professionals The Netherlands to the cash-generating unit Online Business Solutions in 2014. The comparative figures have beenrestated.

Impairment for cash-generating units where goodwill is capitalisedThe cash-generating units are subject to impairment testing annually and in case of a triggering event. Impairment testing involves comparing thecarrying amount (goodwill, property, plant and equipment; intangible assets and working capital) of the cash-generating units concerned with theirrecoverable value. This recoverable value is determined by calculating their value-in-use. These calculations are based on future cash flows discountedusing a pre-tax discount factor. For the different groups of cash-generating units this resulted in a pre-tax discount factor between 10.7% and 18.0%(2013: between 9.2% and 17.4%).Future cash flows of cash-generating units are estimated based on actual income from operations and projected future performance, which are basedon past performance, management expectations and assumptions about revenue growth, gross margin and cost developments for a period of sevenyears (2013: seven years). This is reviewed against external data. Cash flow projections after this period are extrapolated using a growth rate of 0.6%(2013: 1.0%) for the entire group. The growth rate is based on expected inflation.



The divergence from the maximum five-year projection required under IAS 36 reflects past experience showing that a full market cycle in this sectorlasts around seven years. The growth assumptions are based on a cyclical pattern which provides a favourable medium-term growth outlook in mostcountries due to a low penetration of flexible labour and a low degree of specialisation (specialist activities).

The main assumptions for the impairment test calculations are:• Expected average annual group revenue growth of 5% to 7% during the first three years and 3% to 5% in the following four years. Projections for

average annual revenue growth in mature markets range from 5% to 6% during the first three years and 3% to 5% in the following four years. In thegrowth markets the calculations are based on average annual revenue growth of 7% to 8% in the first three years and 4% to 6% in the following fouryears. The calculations take into account improved economic growth projections in the various countries, bearing in mind the cyclical nature of thebusiness.

• Group EBITA of 4% to 6% of revenue over a 7-year period.• Revenue and EBITA growth rates will vary for each cash-generating unit and depend on the revenue mix.

The expected average revenue growth and discount rate of the groups of cash-generating units where a significant part of the goodwill is allocated areon an annual basis as follows:

2014

ASSUMED PROJECTEDAVERAGE REVENUEGROWTH 2015-2021

PRE-TAXDISCOUNT RATE

Specialist Staffing The Netherlands 4.5% 12.8%General Staffing The Netherlands 3.8% 12.8%General Staffing Belgium 4.6% 15.8%Specialist Staffing Germany 5.5% 13.2%Professionals The Netherlands 6.4% 12.8%

2013

ASSUMED PROJECTEDAVERAGE REVENUEGROWTH 2014-2020

PRE-TAXDISCOUNT RATE

Specialist Staffing The Netherlands 4.6% 12.2%General Staffing The Netherlands 3.0% 12.4%General Staffing Belgium 3.6% 15.5%Specialist Staffing Germany 5.0% 12.6%Professionals The Netherlands 4.5% 12.2%

The expected average revenue growth of the cash-generating units largely exceeded last year’s expectations as a result of the expected growth gross ofdomestic product in the most important countries for USG People. In the medium term all cash-generating units are expected to benefit from theinvestments in innovations and ICT and the scale of new and existing business models.

Based on these expectations no impairment was recognised on goodwill, property, plant and equipment, and other intangible assets (2013: € 0).Sensitivity analyses were performed for possible scenarios which can lead to impairment. The outcome of these sensitivity analyses, for the groups ofcash-generating units to which a signification part of the goodwill is attributed reveals the following:• A 50 basis point rise in the pre-tax discount factor can lower the amount by which the value-in-use exceeds the carrying value by 12%. This would

result in an impairment of € 4 million.• If revenue projections for 2015 are lowered by 10% and therefore also revenue levels for the years that follow, this could lower the amount by which

the value-in-use exceeds the carrying value by 36% and could result in a total impairment of € 24 million.• If the projections for EBITA as a percentage of revenue for the period 2015 to 2021 are lowered by 50 basis points the amount by which the value-in-

use exceeds the carrying value can fall by 36% and result in a total impairment of € 18 million.

Specialist Staffing Germany is the most sensitive cash-generating unit while General Staffing Belgium and Professionals The Netherlands are lesssensitive. Last year Specialist Staffing Germany and General Staffing Belgium were also sensitive to fluctuations in economic assumptions. It should benoted that the headroom of Specialist Staffing Germany is limited, making this cash-generating unit very sensitive to fluctuations in applicableprojections for 2015. If actual EBITA or revenue achieved in 2015 are 0.1% below the figures projected in the model applicable for impairment testing,this will result in an impairment.



The other input variables used in sensitivity analysis calculations have been kept the same as the initial projections. In reality the various input variableswill influence each other, meaning that the outcome of the analysis provides merely an indication of the impact of unilateral changes.

14 | OTHER INTANGIBLE ASSETS

TRADEMARKSCUSTOMER

RELATIONSHIPSCANDIDATE

DATABASES SOFTWARE TOTAL

BREAKDOWN OF CARRYINGAMOUNT AS AT 1 JANUARY 2013Cost 10,313 125,405 7,765 105,902 249,385Cumulative amortisation and impairments -8,667 -101,847 -7,765 -61,123 -179,402Carrying amount as at 1 January 2013 1,646 23,558 - 44,779 69,983

CHANGES IN CARRYING AMOUNTAcquisition of subsidiaries 469 914 - 580 1,963Investments - - - 14,117 14,117Disposals - - - -764 -764Amortisation -1,179 -13,126 - -9,006 -23,311Currency translation differences - - - -1 -1Disposals relating to divestment of subsidiaries - -810 - -1,203 -2,013Balance -710 -13,022 - 3,723 -10,009

BREAKDOWN OF CARRYINGAMOUNT AS AT 31 DECEMBER 2013Cost 10,782 123,981 3,824 105,150 243,737Cumulative amortisation and impairments -9,846 -113,445 -3,824 -56,648 -183,763Carrying amount as at 31 December 2013 936 10,536 - 48,502 59,974

CHANGES IN CARRYING AMOUNTAcquisition of subsidiaries 776 2,546 - 2,052 5,374Investments - 400 - 11,705 12,105Disposals - - - -80 -80Amortisation -353 -6,018 - -9,052 -15,423Impairment - - - -3,955 -3,955Balance 423 -3,072 - 670 -1,979

BREAKDOWN OF CARRYINGAMOUNT AS AT 31 DECEMBER 2014Cost 5,546 65,395 - 115,967 186,908Cumulative amortisation and impairments -4,187 -57,931 - -66,795 -128,913CARRYING AMOUNT AS AT 31 DECEMBER 2014 1,359 7,464 - 49,172 57,995

Investments in software includes an amount of € 6,770 (2013: € 9,642) with respect to software in development.

The amortisation of trademarks and customer relationships of € 6,371 (2013: € 14,244) are recognised as selling costs. Accelerated amortisation of € 685took place in 2013 in connection with a rebranding of trademarks. An amount of € 7,667 (2013: € 7,143) arising from the amortisation of software isincluded in general and administrative expenses; an amount of € 1,385 (2013: € 1,863) is included in selling expenses.

The impairment relates to software that is no longer in use. The impairment is recognised as selling expenses and cover all segments, with the exceptionof Online Business Solutions.

The remaining useful life of the trademarks is between one and seven years, the remaining useful life of the customer relationships is between one andsix years. The remaining useful life of the software is between one and ten years.



15 | FINANCIAL FIXED ASSETS2014 2013

Long-term loan 15,570 10,963Guarantee deposits 1,027 1,303Capitalised transaction fees relating to syndicated credit facility 645 1,089Receivable resulting from CICE tax measure 31,647 13,186Associates 3,786 413BALANCE AS AT 31 DECEMBER 52,675 26,954

The long-term loan mainly relates to a legally required loan to the French government with a payment period of 20 years. The nominal value of this loanis € 16,322 (2013: € 14,910). The amortised cost of this loan is calculated based on the interest on French 10-year government bonds. This interestdeclined from 2.49% at the end of 2013 to 0.83% at the end of 2014, resulting in an adjustment in the carrying value of € 2,684 (2013: - € 996 as a resultof a rise in the interest rate from 1.98% at the end of 2012 to 2.49% at the end of 2013). This is recognised as finance income.

Guarantee deposits are intended as security for the lessor of leased premises and for payment of social security premiums and taxes.

Capitalised transaction fees relate to the syndicated credit facility that was concluded in 2011.

Receivables resulting from the CICE tax measure in France are discounted. This is in line with both the expected settlement period (three years) andapplicable legislation. The measure is aimed at strengthening the competitive position of the French economy and reducing unemployment. The amountof the receivable is calculated as a percentage of the salary and is offset against the amount of income tax payable. If the amount of the receivableexceeds the amount of income tax payable, the amount receivable is paid out not later than three years after it was awarded.

The gain is recognised as cost of sales. The adjustment of the carrying value as a result of the discounting of € 127 is recognised as finance costs. In viewof the expected settlement period the change in the amount receivable is recognised in the consolidated statement of cash flows as other non-cash flowreceivables.

The payment period of the financial fixed assets has not expired and no provision for non-payment has been made.

Associates relate to BC Beheer B.V. and some small interests that are held by the group.

16 | TRADE AND OTHER RECEIVABLES2014 2013

Trade receivables invoiced 253,344 247,705Trade receivables to be invoiced 26,301 19,629Total trade receivables 279,645 267,334Minus: provision for doubtful receivables -4,542 -6,087Trade receivables minus provision for doubtful receivables 275,103 261,247Other current receivables 3,901 4,286Accrued income 15,379 14,370BALANCE AS AT 31 DECEMBER 294,383 279,903



The ageing analysis on the trade receivables is as follows:

2014 2013

Payment period has not yet expired 228,364 212,430Payment period has expired:- < 90 days 44,983 47,432- 91 – 180 days 969 458- > 180 days 787 927Total trade receivables not impaired 275,103 261,247Plus: provision for doubtful receivables 4,542 6,087Total trade receivables 279,645 267,334

Some trade receivables in Belgium, France and Germany are sold. The risks and rewards related to the receivables were transferred to factoringcompanies. At the end of 2014 the group sold € 124.1 million (2013: € 121.1 million) in trade receivables. The group may sell up to € 150 million in tradereceivables at any given time.

Of the trade receivables invoiced of € 253.3 million (including VAT), an amount of € 196.8 million was insured and € 56.5 million was not. Of the uninsuredamount € 23.7 million concerns trade receivables from government authorities. Of the trade receivables invoiced at the end of 2013 of € 247.7 million(including VAT), an amount of € 171.2 million was insured and € 76.5 million was uninsured. Of the uninsured amount € 18.4 million concerned tradereceivables from government authorities.

In 2014 an amount of € 0.3 million (2013: € 0.4 million) was received from the insurance company as compensation for damages.

Movement of the provision for doubtful receivables is as follows:

2014 2013

Balance as at 1 January 6,087 9,612Additions 822 3,212Trade receivables impaired -817 -263Reversals -1,550 -4,952Currency translation differences - 8Divestment of subsidiaries - -1,530BALANCE AS AT 31 DECEMBER 4,542 6,087

The additions of provisions for doubtful receivables and releases from such provisions are recognised as selling expenses in the income statement.

17 | CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS2014 2013

Cash and cash equivalents as stated in the balance sheet 64,691 63,965Bank overdrafts -4,052 -15,018CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AS RECOGNISED IN THE CASH FLOW STATEMENT 60,639 48,947

An amount of € 937 (2013: € 1,340) is not freely available and is intended exclusively to cover guaranteed wage tax payments in the Netherlands. Cashand cash equivalents are lodged exclusively with financial institutions rated no lower than A (S&P, Moody’s, Fitch or A.M. Best).



18 | TOTAL EQUITY18.1. Share capital and share premium

NUMBER OFSHARES (X 1,000)


SHAREPREMIUM TOTAL

Balance as at 1 January 2013 79,716 39,858 366,532 406,390Stock dividend 768 384 -384 -Balance as at 31 December 2013 80,484 40,242 366,148 406,390

Balance as at 1 January 2014 80,484 40,242 366,148 406,390Stock dividend 454 227 -227 -Change from settlement of share plan 19 10 - 10BALANCE AS AT 31 DECEMBER 2014 80,957 40,479 365,921 406,400

The authorised share capital as at 31 December 2014 and 2013 comprised 200 million shares with a nominal value of € 0.50. Holders are entitled to onevote per share at the company’s shareholders’ meetings.

On 3 June 2014 a dividend of € 0.14 per share was distributed in cash or shares. The number of shares giving entitlement to one new ordinary share witha nominal value of € 0.50 was set at 78.302, while 35,552,496 shares were registered for the payment of stock dividend. 454,043 new ordinary shareswere issued for this purpose. An amount of € 6,290 was distributed in cash for the remaining shares.

On 3 June 2013 a dividend of € 0.12 per share was distributed in cash or shares. The number of shares giving entitlement to one new ordinary share witha nominal value of € 0.50 was set at 49.82, while 38,251,943 shares were registered for the payment of stock dividend. 767,802 new ordinary shares wereissued for this purpose. An amount of € 4,976 was distributed in cash for the remaining shares.

On 19 May 2014 19,640 ordinary shares were issued for the final granting of shares under the Unique Share Plan 2008-2010 (note 26).

18.2. ReservesThe following breakdown of reserves applies:

2014 2013

Legal reserves:- Revaluation reserve 1,258 1,258- Currency translation differences -36 -29- Cash flow hedge -356 -- Software developed 12,541 -

13,407 1,229Other reserves:- Retained earnings 57,297 50,716BALANCE AS AT 31 DECEMBER 70,704 51,945

Reference is made to note 9 of the company financial statements for more information on the distribution of dividend and repayment of capital.

18.3. Non-controlling interestsNon-controlling interests reflect the entitlement of third parties to the equity of consolidated group companies in which the group does not hold a 100%interest. In 2014 non-controlling interests amounted to € 1,824 (2013: € 1,249). In 2014 the group acquired two interests which constitute non-controlling interests (note 4).

19 | EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERSAverage earnings per share in 2014 amounted to € 0.32 (2013: - € 0.33). Average diluted earnings per share in 2014 were also € 0.32 (2013: - € 0.33).



The calculation of average earnings per share at 31 December 2014 is based on net income attributable to equity holders, equalling € 25,855 (2013: -€ 26,058) and the weighted average number of outstanding shares in 2014, equalling 80,756 (2013: 80,153). The weighted average number of shares iscalculated as follows:

in thousands of shares 2014 2013

Issued as at 1 January 80,484 79,716Stock dividend 260 437Change from settlement of share plan 12 -Weighted average number of shares during the year 80,756 80,153

Diluted earnings per share are calculated based on 163,090 shares allocated, but not yet distributed, under the Unique Share Plan (2013: 300,701).

Holders of ordinary shares are entitled to the distribution of dividends as approved by the General Meeting of Shareholders. During the General Meetingof Shareholders on 7 May 2015 a dividend for 2014 equal to € 0.16 per share (total dividend of € 12,953) will be proposed. The dividend proposal has notbeen recognised in these financial statements.

20 | BORROWINGSThis note contains information on the contractual terms of the non-current interest-bearing borrowings and liabilities. For more information on theinterest risk exposure, reference is made to note 3.

2014 2013

Carrying amount of non-current interest-bearing borrowings 218,093 209,375Current portion of the borrowings -3,578 -48BALANCE AS AT 31 DECEMBER 214,515 209,327

Conditions and repayment terms at end-2014 based on carrying amount

TOTAL < 1 YEARS 1-2 YEARS 2-5 YEARS > 5 YEARS

Syndicated credit facility 149,416 - 149,416 - -Subordinated credit facility 58,749 - 58,749 - -Contingent considerations for acquisitions 7,685 3,572 - 4,113 -Other non-current credit facilities 2,243 6 1,500 - 737

218,093 3,578 209,665 4,113 737

Conditions and repayment terms at end-2013 based on carrying amount

TOTAL < 1 YEARS 1-2 YEARS 2-5 YEARS > 5 YEARS

Syndicated credit facility 149,042 - - 149,042 -Subordinated credit facility 58,118 - - 58,118 -Other non-current credit facilities 2,215 48 6 1,500 661

209,375 48 6 208,660 661

The group has a syndicated credit facility (revolving and standby facility), concluded in 2011 with a term of five years (July 2016), and a subordinatedcredit facility that was entered into in 2013 and expires on 31 December 2016. The ratio covenants agreed with the banks for the syndicated facility andthe subordinated credit facility are expanded on in note 3.

The syndicated credit facility came into effect in 2013 and consists of the following two tranches:• Tranche A (€ 400 million): revolving credit facility (€ 150 million) of which € 150 million was taken up at the end of 2014 and ancillary credit facilities

(€ 250 million), available in the form of short-term loans and bank guarantees from the syndicate of banks; and• Tranche B (€ 100 million): revolving credit facility and/or backstop facility reserved for a commercial paper programme. This tranche was not used at

the end of 2014.



The interest expenses on the portion of the syndicated credit facility that is taken up are calculated based on the one-month to six-month EURIBOR rateincreased by an interest margin of between 95 and 165 basis points. The interest expenses on the subordinated credit facility are calculated based onthe three-month or six-month EURIBOR rate increased by an interest margin of between 625 and 700 basis points.

Movements in the syndicated credit facility are as follows:

2014 2013

Carrying amount of tranche A as at 1 January 149,042 213,679Interest expenses 2,395 2,960Interest paid -2,021 -2,597Repaid - -65,000Carrying amount of tranche A as at 31 December 149,416 149,042

Movements in the subordinated credit facility are as follows:

2014 2013

Carrying amount of liability as at 1 January 58,118 -Withdrawn - 60,000Recognised transaction fees - -2,037Interest expenses 4,618 1,231Interest paid -3,987 -1,076Carrying amount of liability as at 31 December 58,749 58,118

Interest expenses and commitment and utilisation feeThe average interest rate on credit facility A in 2014 was 1.3% (2013: 1.3%). The commitment and utilisation fee amounted to € 1,309 in 2014 (2013:€ 1,789) and is recognised as finance costs in the income statement. The average interest rate paid on the subordinated credit facility was 6.6% in 2014(2013: 6.8%).

21 | DERIVATIVE FINANCIAL INSTRUMENTSThe group has concluded three interest rate derivative contracts with a view to controlling the interest rate risk. Hedge accounting in accordance withIAS 39 is applied to these new interest rate derivative contracts. The interest rate derivatives are viewed to be effective. The derivatives have beenagreed with the banks that issued the syndicated credit facility.

The three interest rate derivatives came into effect on 31 December 2013 for a period of three years for a total nominal value of € 42 million. The variableinterest rate based on the 3-month EURIBOR is hedged at a fixed rate of 0.63% per year. At the end of 2014 the derivatives had a negative value of € 475(2013: € 46). The impact (after tax) on equity is - € 356 (2013: - € 34), which led to a recognised impact of - € 322 on comprehensive income in 2014. Thecounterparties did not demand or provide any guarantees for the derivatives.

The balance sheet item also contains a - € 108 valuation of an option which the group has on 20% of the shares in BC Beheer B.V.



22 | PENSION-RELATED LIABILITIESThe group contributes to a number of defined benefit pension schemes (average salary plans) which provide for pensions for employees when they reachthe age of retirement. These schemes apply to part of the workforce in the Netherlands, France, Belgium and Germany. The other countries where thegroup operates have defined contribution schemes and/or retirement provisions that comply with the national regulations and customs in thosecountries.

The determination of annual costs for the year takes into account the nature of the scheme, which provides for indexation of pension entitlementsinsofar as the separate pension trusts’ investment proceeds exceed the actuarially required interest and insofar as surplus interest is available.The insured fully-financed obligations have a limited contractual term. The main contract expires on 31 December 2015 and may impact futureexpenses.

22.1. Movements in pension liabilities and investmentsPENSION-RELATED LIABILITIES 2014 2013

Present value of fully financed obligations 222,746 166,940Minus: fair value of fund investments 220,390 163,187Net liability of fully financed obligations 2,356 3,753Present value of non-fully financed obligations 3,572 2,448NET LIABILITY 5,928 6,201

The defined contribution pension schemes set up in Belgium qualify as defined pension scheme. The Belgian supplementary pension act (WetAanvullende Pensioenen) requires that the employer guarantee a minimum return throughout the entire term of the contract with the insurer of 3.75%on the employee’s contribution and of 3.25% on the employer’s contribution. In the past these schemes were not recognised as such because resultsachieved in the past have up to now exceeded minimum return requirements. The ongoing low interest rate achievable on European financial markets isincreasingly risky for employers. This scheme is included in pension liabilities and investments with effect from 2014 for an amount of € 3,368.



LIABILITIESFUND-

INVESTMENTS TOTAL BALANCE

TOTAL CHANGEINCOME

STATEMENT

TOTAL CHANGECOMPREHENSIVE

INCOME

Balance as at 1 January 2013 166,715 -159,234 7,481Divestments of subsidiaries -5,331 4,706 -625Service costs 1,798 91 1,889 1,889Interest expenses 5,546 -5,263 283 283Adjustment related to restructuring -252 - -252 -252Remeasurement: - - -- Return on investments, excluding interestexpenses - -3,462 -3,462 -3,462- Actuarial gains/losses as a result of changes infinancial assumptions 3,248 - 3,248 3,248- Actuarial gains/losses as a result of changes indemographic assumptions 2 - 2 2- Actuarial gains/losses as a result of experiences -81 - -81 -81

3,169 -3,462 -293 -293Employers' contribution - -2,282 -2,282Participants' contribution 45 -45 -Benefits paid -2,302 2,302 -Balance as at 31 December 2013 169,388 -163,187 6,201 1,920 -293

Balance as at 1 January 2014 169,388 -163,187 6,201Service costs 1,502 85 1,587 1,587Interest expenses 5,673 -5,387 286 286Adjustment related to restructuring and change toscheme -997 - -997 -997Remeasurement:- Return on investments, excluding interestexpenses - -49,509 -49,509 -49,509- Actuarial gains/losses as a result of changes infinancial assumptions 44,939 - 44,939 44,939- Actuarial gains/losses as a result of changes indemographic assumptions 846 - 846 846- Actuarial gains/losses as a result of experiences 4,170 - 4,170 4,170

49,955 -49,509 446 - 446Employers' contribution - -1,595 -1,595Participants' contribution 51 -51 -Benefits paid -2,622 2,622 -Initial recognition 3,368 -3,368 -BALANCE AS AT 31 DECEMBER 2014 226,318 -220,390 5,928 876 446

The item ‘Adjustment related to restructuring and change to scheme’ in 2014 mainly concerns an adjustment of the Dutch scheme to legislation on1 January 2015.The costs of € 876 (2013: € 1,920) are included in the income statement as personnel expenses. Actuarial gains/losses of € 446 (2013: - € 293), € 566(2013: - € 203) after deduction of income tax, are recognised in comprehensive income. Of the total liabilities, an amount of € 219 million (2013:€ 166 million) concerns Dutch schemes.

22.2. Principal actuarial assumptionsBecause the commitments of the pension insurer are virtually the same with respect to the amount and term as the payment commitments ensuingfrom the defined benefit pension plan, fair value of the investments is defined as the present value of the relevant commitment as set out in IAS 19.115.This valuation policy is known as the ‘fair value principle’ and both methods fit in this principle.



The principal actuarial assumptions at the balance sheet date expressed as a margin spread are as follows:

2014 2013

Discount rate as at 31 December 1.65%-2.5% 3.3%-3.5%Expected long-term rate of return on assets as at 31 December 1.65%-2.5% 3.3%-3.5%Future salary increases 0.6%-4.0% 0.6%-4.0%Future pension increases 0.5%-1.0% 0.5%-1.0%Future inflation 1.75%-2.0% 2.0%

Calculations of the mortality rate at year-end 2014 for the Netherlands are based on the AG prognosis tables 2014 (-1/-1) (2013: AG 2012-2062 (-1/-1))and calculations for France are based on INSEE 2010-2012 (2013: 2009-2011).

The employers’ contribution is estimated at € 1,875 in 2015.The interest rate sensitivity of the main liability was 22.9 years at 31 December 2014 (2013: 21.5 years).

The sensitivity of the present value of the fully-financed obligations to the main assumptions applied is as follows:

2014 CHANGE IN ASSUMPTIONIMPACT OF INCREASE OF

ASSUMPTIONIMPACT OF DECREASE OF

ASSUMPTION

Discount rate 0.5% -10% +11%Future salary increases 0.5% 0% 0%Future pension increases 0.5% +11% -10%Life expectancy 1 year +3% -3%

2013 CHANGE IN ASSUMPTIONIMPACT OF INCREASE OF

ASSUMPTIONIMPACT OF DECREASE OF

ASSUMPTION

Discount rate 0.5% -10% +10%Future salary increases 0.5% 0% 0%Future pension increases 0.5% +12% -10%Life expectancy 1 year +3% -3%

Sensitivity is calculated in the event of a change in the respective assumption whereby the other assumptions remain unchanged. The method ofsensitivity analysis was the same as in the previous year.



23 | PROVISIONS

RESTRUCTURINGPROVISION

PERSONNEL-RELATED

PROVISIONSOTHER

PROVISIONS TOTAL

Balance as at 1 January 2013 12,598 9,188 31,668 53,454Additions 40,268 5,469 10,165 55,902Usage -19,064 -365 -10,339 -29,768Reversals -3,475 -1,013 -5,562 -10,050Currency translation differences -1 - - -1Divestment of subsidiaries -153 -655 -470 -1,278Balance as at 31 December 2013 30,173 12,624 25,462 68,259

Non-current 15,781 5,142 15,375 36,298Current 14,392 7,482 10,087 31,961Balance as at 31 December 2013 30,173 12,624 25,462 68,259

Balance as at 1 January 2014 30,173 12,624 25,462 68,259Additions 4,255 3,596 5,921 13,772Usage -12,714 -832 -2,683 -16,229Reversals -2,759 -1,912 -2,286 -6,957Currency translation differences 7 - - 7Balance as at 31 December 2014 18,962 13,476 26,414 58,852

Non-current 10,431 5,785 15,217 31,433Current 8,531 7,691 11,197 27,419BALANCE AS AT 31 DECEMBER 2014 18,962 13,476 26,414 58,852

At the end of 2014 an amount of € 17,018 (2013: € 24,514) of the restructuring provision related to lease commitments on buildings that are no longer inuse, while € 1,944 (2013: € 5,659) concerned employee severance arrangements.

In both 2014 and 2013 parts of the restructuring provision were reversed as less of the provision was required for employee severance arrangements andbetter than initially expected prospects for letting vacant premises. The amount of the restructuring provision for vacant premises largely depends onthe prospect of reletting these premises. The amount of the provision is amended if the prospects for letting vacant premises change.

The personnel-related provisions include continuation of wage payment during extended periods of sickness, long-term service awards, payments upontermination of employment for reasons other than retirement and share plans settled in cash and cash equivalents. The provisions were determined onthe basis of expectations concerning the recovery of sick employees, staff turnover and expected wage increases.

The other provisions include an amount of € 14,656 relating to the settlement of the CGZP/AMP case in Germany. Following a legal ruling in December2010 the labour court in Berlin ruled on 30 May 2011 that the collective labour agreements concluded by CGZP/AMP in previous years were invalid,resulting in the possibility of claims against the group for these earlier years. These claims relate to the collection of social security contributions andsubsequent payments to temporary employees. The authorities further examined the case in 2012 and 2013 and in 2013 the outcome became known.Based on the outcome of the examination the group lowered the provision by € 4,500 in 2013. The group appealed the size of the claim at the end of 2013and a suspension of payment is in place pending a ruling.

A € 4,727 provision was created in 2013 for the possible future outflow of funds as a result of guarantees issued relating to the divestment ofsubsidiaries in the past. As a result of new information and an agreement reached with the buyer this provision was increased by € 2,056 in 2014.An amount of € 8,022 of the provision used in 2013 relates to the settlement of the liability with regard to the acquisition of subsidiary Allgeier DL inGermany in 2008.The remaining other provisions relate to the settlement of several legal proceedings, among other things.

Expected projected future cash flows are discounted using a factor of 0.27% (2013: 0.65%) if their impact is material. A change of 100 basis points in thediscount rate results in a € 666 change in the existing value of the provision.



24 | BANK OVERDRAFTS AND BORROWINGS2014 2013

Current portion of non-current borrowings 3,578 48Bank overdrafts 4,052 15,018Commercial paperprogrammes - 17,466BALANCE AS AT 31 DECEMBER 7,630 32,532

USG People Interservices N.V., a subsidiary of USG People N.V., has a commercial paper programme with a total value of € 100 million. A sum of€ 100 million from tranche B of the syndicated credit facility is reserved as a backstop to cover this programme. The maximum term of the loansconcluded is three months. The finance costs are based on short-term EURIBOR.

25 | TRADE AND OTHER PAYABLES2014 2013

Trade payables 35,860 35,490Personnel-related liabilities 243,951 240,120VAT payable 90,275 87,190Other payables 13,582 8,868Accrued liabilities 41,228 24,332BALANCE AS AT 31 DECEMBER 424,896 396,000

Accrued liabilities in 2014 also include € 17.9 million (2013: € 8.1 million) relating to undue payments by the factoring company.

26 | SHARE-BASED REMUNERATIONWages and salaries includes an amount of € 404 (2013: € 378) relating to share-based remuneration for key management and other employees. Anamount of € 89 (2013: - € 180) in costs relating to share-based remuneration was directly recognised in equity. The costs of share-based remunerationsettled in cash were € 315 (2013: € 558). The provisions include an amount of € 1,363 (2013: € 1,238) for share-based payments settled in cash.

Unique Share Plan 2008 - 2010The Unique Share Plan 2008-2010 covers the period from 1 January 2008 to 1 January 2014. The initial unconditional granting of 156,856 shares tookplace in May 2011. Additionally, 19,640 more shares were granted in May 2014 to participants who had retained the shares obtained in 2011 and werestill in the employment of the group. New shares were issued for this purpose and this resulted in an increase in the share capital by € 10. The wage taxof the members of key management is payable by the group, which is recognised as a transaction settled in cash.

The fair value was determined using the Black-Scholes model, with expected volatility being based on historic volatility over a period equal to theremaining term of the share plan and the risk-free interest rate being based on the AAA-rated euro area government bonds applying to the remainingterm of the share plan.



The movements were as follows:

2014KEY-MANAGEMENT

2014OTHER

2014SETTLED IN

SHARESSETTLED IN

CASHSETTLED IN

SHARES

Number of participants 4 20Balance as at 1 January 15,203 5,013Withdrawn - -576Unconditionally granted -15,203 -4,437Balance as at 31 December - -

The intrinsic value of share-based payments settled in cash on the date the shares were unconditionally granted in May 2014 was € 10.95.

In 2013 the movements and the parameters were as follows:

2013KEY-MANAGEMENT

2014OTHER

2014SETTLED IN

SHARESSETTLED IN

CASHSETTLED IN

SHARES

Number of participants 4 25Balance as at 1 January 15,541 7,683Withdrawn -338 -2,670Balance as at 31 December 15,203 5,013

Fair value € 7.52 - € 10.08 € 9.69 € 4.99 - € 10.08Average share price for the determination of fair value € 11.18 - € 13.37 € 9.69 € 7.23 - € 12.07Dividend yield 5% - 9% 0% 5% - 9%Volatility 41% - 50% 37% 41% - 50%Risk-free interest rate 1.4% - 4.2% 0.1% 1.4% - 4.6%

Unique Share Plan 2011 - 2014The Unique Share Plan 2011-2014 covers the period from 1 January 2011 to 1 January 2015. The unconditional granting of shares will take place in May2015, after which a holding period of one year will apply. In addition to the participant still being in the employment of the group at the time ofunconditional granting, the performance criteria are based on the extent to which targets relating to financial results are met. Based on the financialresults realised a matrix applies to each performance year that can result in a maximum of 140% times and a minimum of zero times the norm numberof shares being granted conditionally. For 2014 the matrix indicated underlying EBITA as a percentage of the gross margin (conversion ratio) of between13.7% and 22.9% (2013: between 11.3% and 16.5%) and underlying EBITA as a percentage of revenue of between 2.9% and 4.9% (2013: between 2.4%and 3.6%). Additional non-financial performance targets were agreed for key management which could result in a maximum of 30.0% of the normnumber of shares being granted conditionally in each performance year. As a result the maximum factor applicable to key management is 170.0% of thenorm number of shares granted conditionally.In determining the costs of this share plan the 2014 performance criteria take into account a factor of 56% (2013: 63.0%) for the financial performancecriteria and a factor of 29.25% for the non-financial performance criteria (2013: 20%) for key management. A factor of 56.0% (2013: 63.0%) is taken intoaccount for other personnel based on the financial criteria. The wage tax of key management is payable by the group, which will be recognised as atransaction settled in cash. The gross value of the shares conditionally granted each year is set at a maximum of the fixed annual remuneration for bothkey management and other personnel. The average share price in the course of the respective performance year applies in the calculation of this grossvalue.

In 2014 another 6,531 shares were conditionally granted to other personnel.

The fair value has been determined based on a Monte Carlo model to express the valuation of the maximum amount conditionally granted. The methodbases expected volatility on the historic volatility for a period equal to the remaining term of the share plan and the risk-free interest is based on theAAA-rated euro area government bonds applying to a period equal to the remaining term of the share plan. In determining fair value while taking into



account a grossing up of the settlement due to the wage tax to be paid by the group, the intrinsic value of share-based payments settled in cash is equalto the share price.

The movements and the parameters were as follows:

2014 KEY-MANAGEMENT OTHERSETTLED IN

SHARESSETTLED IN

CASHSETTLED IN

SHARES

Number of participants 2 56Balance as at 1 January 126,278 139,207Conditionally granted - 9,143Withdrawn -31,782 -79,756Balance as at 31 December 94,496 68,594


The number of shares stated in the table is based on performance factors achieved. The withdrawal of conditionally granted shares relates to thetermination of employment of participants and an adjustment of the performance factor for 2014 from 170.0% to 85.25% for key management and from140.0% to 56.0% for other employees.

In 2013 the movement and the parameters were as follows:

2013 KEY-MANAGEMENT OTHERSETTLED IN

SHARESSETTLED IN

CASHSETTLED IN

SHARES

Number of participants 2 67Balance as at 1 January 305,128 254,506Conditionally granted 17,000 26,005Withdrawn -195,850 -141,304Balance as at 31 December 126,278 139,207


The number of shares stated in the table is based on performance factors achieved in 2011, 2012 and 2013 and the maximum performance factors for2014. The withdrawal of conditionally granted shares relates to the termination of employment of participants and an adjustment of the performancefactor for 2013 from 170.0% to 83.0% for key management and from 140.0% to 63.0% for other employees.



Additional share planIn 2012 an additional share plan was launched for a number of employees at a newly acquired operating company. All grantings under this share planwere withdrawn in July 2013 and immediately replaced by new grantings effective 1 April 2013.

The number of shares conditionally granted under the new plan amounts to 30,000. Shares were withdrawn in 2013 (15,000 shares) and in 2014 (15,000shares) based on the performance criteria.

The fair value is determined using the Black-Scholes model, with expected volatility being based on historic volatility over a period equal to theremaining term of the share plan and the risk-free interest rate being based on the zero coupon interest rate on government bonds applying to theremaining term of the share plan.


2014 20152014 SETTLED IN SHARES

Number of participants - 4Balance as at 1 January - 15,000Conditionally granted - -Withdrawn - -15,000Balance as at 31 December - -

Fair value € 5.16 € 4.96Average share price for the determination of fair value € 5.26 € 5.26Dividend yield 3% 3%Volatility 28% 43%Risk-free interest rate 0.1% 0.2%


2014 20152013 SETTLED IN SHARES

Number of participants 6 6Balance as at 1 January - -Conditionally granted 15,000 15,000Withdrawn -15,000 -Balance as at 31 December - 15,000

Fair value € 5.16 € 4.96Average share price for the determination of fair value € 5.26 € 5.26Dividend yield 3% 3%Volatility 28% 43%Risk-free interest rate 0.1% 0.2%

USG People SAR planThe USG People SAR plan 2008 - 2010 came to a conclusion in 2014 without a settlement taking place. The USG People SAR plan 2011 - 2014 pertains tothe period from 2011 to 2018. The only performance criterion for unconditional settlement after three years is that the participant is still employed bythe group at the time of settlement. The USG People SAR plan is granted to the management that is not entitled to take part in the Unique Share Plan.Settlement will take place in cash and will equate to the difference between the share price in May 2011 (€ 12.32), May 2012 (€ 6.58), May 2013 (€ 5.91)May 2014 (€ 11.33), respectively, and the share price at the moment of unconditional settlement. Settlement after three years will be postponed by sixmonths if the distributable amount for each SAR is less than € 1. If after this six-month period the distributable amount is still less than € 1, settlementwill once again be postponed for six months. If the distributable amount is still less than € 1 after this period, no settlement will take place.



The fair value has been determined based on a Monte Carlo model, which provides a simulation of the market value applied to the SAR plan. The methodbases expected volatility (35% - 43%) on the historic volatility for a period equal to the remaining term of the SAR and the risk-free interest rate (-0.1% -0,0%) is based on the AAA-rated euro area government bonds applying to a period equal to the remaining term of the SAR. The share price used todetermine the valuation is € 9.33 and the dividend yield is set in a range of 0% - 2%. At the end of 2014 the number of outstanding SARs was 476,800(2013: 458,778). In the course of the year 152,100 SARs were awarded and 134,078 SARs withdrawn. In 2014 the costs of the SAR plan totalled € 248(2013: € 318). An amount of € 640 (2013: € 393) is included in the provisions.

27 | RELATED PARTIES27.1. Remuneration of key managementKey management consists of the members of the Executive Board and the Supervisory Board.

2014 2013

Salaries and other short-term remuneration 1,989 3,501Pensions 249 469Severance pay - 2,844Share-based remuneration 249 75Remuneration of Supervisory Board 257 241

2,744 7,130

No loans or guarantees have been issued to the members of the Executive Board and Supervisory Board.



27.2. Remuneration of Executive BoardThe remuneration of the members of the Executive Board as recognised in the income statement is as follows:

FIXEDREMUNERATION

PENSIONCONTRIBUTION

VARIABLESHORT-

TERM CASHREMUNERATION

VARIABLE LONG-TERM SHARE

REMUNERATION1)

SEVERANCEPAY2) TOTAL

CRISISLEVY3)

ROB ZANDBERGEN2014 625 143 521 217 - 1,506 -2013 625 143 529 389 - 1,686 109

LEEN GEIRNAERDT2014 460 106 383 32 - 981 -2013 400 92 338 223 - 1,053 35

ERIC DE JONG2014 - - - - - - -2013 367 84 310 -248 1,230 1,743 1

HUBERT VANHOE2014 - - - - - - -2013 350 81 32 -114 615 964 46

ALBERT JAN JONGSMA2014 - - - - - - -2013 298 69 252 -175 999 1,443 39

1) Including shares granted under the Unique Share Plan 2008-2010 and the Unique Share Plan 2011-2014, recognised in accordance with IFRS 2. Theamount for individual Executive Board members vary depending on the applicable tax conditions.

2) Under the so-called charge on excessive severance pay as set out in article 32bb of the Dutch Wages and Salaries Tax Act of 1964 an amount of € 15for Albert Jan Jongsma was recognised as personnel expenses in 2013.

3) Under the so-called crisis levy as set out in article 32bd of the Dutch Wages and Salaries Tax Act of 1964 an amount of € 230 was recognised aspersonnel costs for Executive Board members in 2013. The amount for individual Executive Board members vary depending on the applicable taxconditions.



The variable long-term share remuneration is shown for the full year and can be broken down as follows:

Unique Share Plan 2008-2010

CONDITIONALLYGRANTED

BASED ON NORMNUMBERS

FACTORFOR COST

CALCULATIONUNCONDITIONALLY

GRANTED IN 2011

ADDITIONALSHARES TO BE

GRANTED IFRETAINED FROM

2011-2014

CHARGE IN 2014INCOME

STATEMENT

CHARGE IN 2013 ININCOME

STATEMENT

ROB ZANDBERGEN2008 15,000 40.0% 6,000 1,500 4 102009 15,000 0.0% - - - -2010 17,500 140.0% 24,500 6,125 14 39

47,500 30,500 7,625 18 49

LEEN GEIRNAERDT2008 400 40.0% 160 40 - -2009 500 0.0% - - - -2010 1,750 140.0% 2,450 613 1 3

2,650 2,610 653 1 3

ERIC DE JONG2008 5,000 40.0% 2,000 500 - 32009 5,000 0.0% - - - -2010 10,000 140.0% 14,000 3,500 - 22

20,000 16,000 4,000 - 25

ALBERT JAN JONGSMA2008 3,000 40.0% 1,200 300 - 22009 3,000 0.0% - - - -2010 7,500 140.0% 10,500 2,625 - 16

13,500 11,700 2,925 - 18



Unique Share Plan 2011-2014

CONDITIONALLYGRANTED

BASED ON NORMNUMBERS

FACTORFOR COST

CALCULATION

CONDITIONALNUMBER BASED

ON PERFOR-MANCE IN

FINANCIAL YEAR

CHARGE IN 2014INCOME

STATEMENT

CHARGE IN 2013IN INCOME

STATEMENT

ROB ZANDBERGEN2011 22,500 30.0% 6,750 28 412012 22,500 55.5% 12,488 53 752013 22,500 83.0% 18,675 79 882014 22,500 85.3% 19,181 39 136

90,000 57,094 199 340

LEEN GEIRNAERDT2011 12,500 30.0% 3,750 6 232012 15,000 56.1% 8,415 13 502013 15,000 83.0% 12,450 19 582014 15,000 85.3% 12,787 -7 89

57,500 37,402 31 220

ERIC DE JONG -273HUBERT VANHOE -114ALBERT JAN JONGSMA -193



27.3. Remuneration of the Supervisory BoardThe remuneration of the Supervisory Board is as follows:

2014 2013

Cees Veerman 67 67Joost van Heyningen Nanninga - 18Rinse de Jong 52 52Marike van Lier Lels 18 52Willemijn Maas 34 -Alex Mulder 52 52Johnny Thijs 34 -

257 241

The term of Marike van Lier Lels ended in May 2014. The term of of Joost van Heyningen Nanninga ended in May 2013. No option rights are granted tomembers of the Supervisory Board and no operating assets are made available to them.

27.4. OtherIn 2014 a few transactions took place between USG People N.V. and its major shareholder. These transactions relate to the provision of goods andservices worth € 156 (2013: € 400) and took place at standard market conditions.

28 | COMMITMENTSThird-party property lease commitments relating to property, cars and other assets totalled around € 103.6 million at the end of 2014 (2013:€ 103.8 million). A breakdown of these commitments according to maturity is as follows:

2014 2013

Less than one year 31,639 39,987Between one to five years 47,203 56,182More than five years 24,755 7,641

103,597 103,810

The group leases offices under an operating lease construction. The maturity of these contracts ranges from three to fifteen years, with an option toextend at the end of the period.

Lease expenses totalling € 42,481 (2013: € 45,917) were recognised in the income statement relating to cars and property leases. Lease expenses in2013 also include an amount of € 11,990 relating to the provision of future lease periods in connection with the merger of two head offices.

29 | CONTINGENT ASSETS AND LIABILITIESDue to the nature of the group’s activities, bank guarantees for a total amount of € 83,014 (2013: € 83,647) have been issued.

In 2011 USG People in Germany filed lawsuits against former directors for reasons including a breach of a non-competition clause. The ruling is expectedto be favourable and lead to a substantial compensation for USG People. The time required to complete the civil lawsuit is currently unknown. Theestimated damage as a result of the aforementioned lawsuits amounts to € 22,000. The ultimate amount of possible claims is not yet known.

In France, social security authority URSSAF imposed an assessment on our operating company Start People SAS in 2011 in connection with a socialsecurity investigation. The assessment is based on the assumption that taxes and social security contributions owed on the salaries of temporaryemployees were calculated incorrectly. The assessment concerns the years 2009 and 2010 and amounts to € 16,922. The interest on the tax due wasdeemed to be € 2,449 at the end of 2014. USG People lodged an appeal against the URSSAF assessment with the Commission de Recours Amiable at theend of February 2012. This appeal was dismissed on 21 June 2012. USG People subsequently lodged an appeal with the Tribunal des affaires de sécuritésociale at the end of July 2012 and the court ruled in USG People’s favour on 3 September 2014. URSSAF subsequently appealed and a ruling is expectedon 23 March 2015. USG People believes that the payments were in accordance with the law. Based on this information it is assumed that no liabilityexists and no provision has been recognised.



30 | EVENTS AFTER BALANCE SHEET DATENo events of any material interest to the group as a whole took place after the balance sheet date.

31 | PRINCIPAL SUBSIDIARIES AND ASSOCIATESThe main subsidiaries in which USG People N.V. holds a direct or indirect interest are listed below. The services provided by the subsidiaries consistmainly of staffing and secondment services.

SUBSIDIARY STAKE OWNED CITY, COUNTRY

Call-IT Belgium NV 100 Antwerp, BelgiumConnecting Expertise NV 51 Dikkelvenne, BelgiumExpress Medical NV 100 Antwerp, BelgiumReceptel NV 100 Antwerp, BelgiumSecretary Plus Management Support NV 100 Antwerp, BelgiumSecretary Plus Outsourcing Solutions NV 100 Antwerp, BelgiumStart People NV 100 Antwerp, BelgiumStart People Services NV 100 Antwerp, BelgiumUnique NV 100 Antwerp, BelgiumUnique Career NV 100 Antwerp, BelgiumUSG Engineering Professionals NV 100 Antwerp, BelgiumUSG People Belgium NV 100 Antwerp, BelgiumUSG People Interservices NV 100 Antwerp, BelgiumUSG Professionals NV 100 Antwerp, BelgiumTechnicum GmbH 100 Merkers-Kieselbach, GermanySecretary Plus Management Support GmbH 100 Munich, GermanyUnique Personalservices GmbH 100 Munich, GermanyStart People SAS 100 Saint-Julien-lès-Metz, FranceUSG Professionals SAS 100 Paris, FranceAdver-Online B.V. 51 Heemstede, The NetherlandsASA Student B.V. 100 Almere, The NetherlandsCall-IT International B.V. 100 Weert, The NetherlandsUSG Finance Professionals B.V. 100 Utrecht, The NetherlandsCreyf’s Diensten B.V. 100 Almere, The NetherlandsCreyf’s Interim B.V. 100 Den Bosch, The NetherlandsNetwerven B.V. 51 Amsterdam, The NetherlandsSecretary Plus Management Support B.V. 100 The Hague, The NetherlandsStart People B.V. 100 Almere, The NetherlandsStart People Diensten B.V. 100 Almere, The NetherlandsStart People Medi Interim B.V. 100 Almere, The NetherlandsStart People Tranport Flex B.V. 100 Almere, The NetherlandsStart People Inhouse Services B.V. 100 Almere, The NetherlandsUnique Diensten B.V. 100 Almere, The NetherlandsUnique Nederland B.V. 100 Almere, The NetherlandsUSG Marketing, Communication & Sales Professionals B.V. 100 Almere, The NetherlandsUSG Engineering Professionals B.V. 100 Almere, The NetherlandsUSG Legal Professionals B.V. 100 Utrecht, The NetherlandsUSG People The Netherlands B.V. 100 Almere, The NetherlandsUSG Restart B.V. 100 Utrecht, The Netherlands



COMPANY FINANCIAL STATEMENTS—

COMPANY INCOME STATEMENTamounts in thousands of euros 2014 2013

Income of subsidiaries after taxes 42,457 -4,774Income of USG People N.V. after taxes -16,602 -21,284NET INCOME 25,855 -26,058

COMPANY BALANCE SHEET AS AT 31 DECEMBER (BEFORE PROFIT APPROPRIATION)amounts in thousands of euros note: 2014 2013

ASSETSIntangible assets 2 364 650

Property, plant and equipment 3 106 2

Subsidiaries 4 942,898 924,753Other financial fixed assets 5 2,698 2,524Deferred income tax assets 6 10,079 8,585Financial fixed assets 955,675 935,862Non-current assets 956,145 936,514

Other current receivables 7 2,317 12,531Current income tax receivables 9,643 6,701Cash and cash equivalents 10 6Current assets 11,970 19,238

TOTAL ASSETS 968,115 955,752

EQUITY AND LIABILITIESPaid-up and called-up capital 40,479 40,242Share premium 365,921 366,148Legal reserves 13,407 1,229Other reserves 31,442 76,774Net income for the financial year 25,855 -26,058Equity 9 477,104 458,335

Provisions 10 1,432 1,564

Non-current liabilities 11 379,222 211,917

Current liabilities 12 110,357 283,936Liabilities 491,011 497,417

TOTAL EQUITY AND LIABILITIES 968,115 955,752

company financial statements


NOTES TO THE COMPANY INCOME STATEMENT AND BALANCE SHEET

01 | ACCOUNTING POLICIESThe company financial statements of USG People N.V. are prepared in accordance with the legal regulations of Part 9, Book 2 of the Dutch Civil Code. Inthis context the group makes use of the option provided under article 362 section 8 Book 2 of the Dutch Civil Code to apply the same principles ofvaluation and determination of results in the company financial statements (including the principles for presenting financial instruments as equity orliabilities) as those applied in the consolidated financial statements. The company presents a condensed version of the income statement in accordancewith article 402 Part 9 Book 2 of the Dutch Civil Code.

Participating interests in subsidiaries and other associates over which USG People N.V. is able to exercise dominant control or which it managescentrally are presented according to the equity method as set out by the Dutch Accounting Standards Board.

02 | INTANGIBLE ASSETS2014 2013

Acquisition price 4,526 4,190Cumulative amortisation and impairment -3,876 -3,548Carrying amount as at 1 January 650 642

Investments during the year 12 336Divestments during the year -143 -Amortisation during the year -155 -328Carrying amount as at 31 December 364 650

Breakdown of carrying amountAcquisition price 4,251 4,526Cumulative amortisation and impairment -3,887 -3,876CARRYING AMOUNT AS AT 31 DECEMBER 364 650

03 | PROPERTY, PLANT AND EQUIPMENT2014 2013

Acquisition price 213 845Cumulative depreciation and impairment -211 -129Carrying amount as at 1 January 2 716

Investments during the year 105 -Divestments during the year - -571Depreciation during the year -1 -143Carrying amount as at 31 December 106 2

Breakdown of carrying amountAcquisition price 270 213Cumulative depreciation and impairment -164 -211CARRYING AMOUNT AS AT 31 DECEMBER 106 2



04 | SUBSIDIARIES2014 2013

Balance as at 1 January 924,753 924,672

Acquisition of subsidiaries 9,261 4,711Capital contribution to subsidiaries - 93,992Result from subsidiaries 42,457 -4,774Remeasurement of pension liability in subsidiary -566 203Dividend received -33,000 -94,507Currency translation differences -7 456BALANCE AS AT 31 DECEMBER 942,898 924,753

The acquisition of subsidiaries relates to the acquisition of Netwerven B.V. and BC Beheer B.V. in 2014 and the purchase of Adver-Online B.V. in 2013(see note 4 of the consolidated financial statements). The capital contribution to subsidiaries in 2013 relates to an increase in the capital of subsidiaries.Please refer to note 31 of the consolidated financial statements for a list of the main subsidiaries.

05 | OTHER FINANCIAL FIXED ASSETS2014 2013

Receivables from group companies 2,000 2,000Other 698 524BALANCE AS AT 31 DECEMBER 2,698 2,524

The movement of receivables from group companies is as follows:

2014 2013

Balance as at 1 January 2,000 22,200

Loan repayment - -9,500Reclassification to short term - -10,700Balance as at 31 December 2,000 2,000

The loan issued has a term of 1 year and an annual interest rate of 1.091%.

06 | DEFERRED INCOME TAX ASSETSChanges in deferred tax assets is as follows:

2014 2013

Balance as at 1 January 8,585 7,794To income statement 1,387 779Cash flow hedge in comprehensive income 107 12BALANCE AS AT 31 DECEMBER 10,079 8,585

The deferred tax assets consists of:

2014 2013

Tax losses carried forward 5,497 8,319Other 4,582 266

10,079 8,585



07 | OTHER CURRENT RECEIVABLES2014 2013

Receivables from group companies 2,193 11,840Other receivables 124 691BALANCE AS AT 31 DECEMBER 2,317 12,531

08 | CURRENT INCOME TAX RECEIVABLESOf the current tax receivables of € 9,643 an amount of € 612 relates to receivables from the tax authority and € 9,031 which is to be settled with theDutch operating companies belonging to the fiscal unity.

09 | EQUITYPaid-up and called-up capitalThe authorised capital at both 31 December 2014 and 31 December 2013 stood at € 100 million, consisting of 200,000,000 ordinary shares with anominal value of € 0.50 each.


CAPITAL

SHAREPREMIUMRESERVE

LEGALRESERVES

OTHERRESERVES

RESULT FORTHE YEAR TOTAL

Balance as at 1 January 2013 39,858 366,532 773 272,940 -191,179 488,924Net income - - - - -26,058 -26,058Remeasurement of pension liabilities - - - 203 - 203Change share plan - - - -180 - -180Cash flow hedge - - - -34 - -34Stock dividend for 2012 384 -384 - - - -Cash dividend for 2012 - - - -4,976 - -4,976Income deducted from other reserves - - - -191,179 191,179 -Currency translation differences - - 456 - - 456Balance as at 31 December 2013 40,242 366,148 1,229 76,774 -26,058 458,335

Balance as at 1 January 2014 40,242 366,148 1,229 76,774 -26,058 458,335Net income - - - - 25,855 25,855Remeasurement of pension liabilities - - - -566 - -566Change from settlement of share plan 10 - - - - 10Change share plan - - - 89 - 89Cash flow hedge - - -356 34 - -322Software developed - - 12,541 -12,541 - -Stock dividend for 2013 227 -227 - - - -Cash dividend for 2013 - - - -6,290 - -6,290Income deducted from other reserves - - - -26,058 26,058 -Currency translation differences - - -7 - - -7BALANCE AS AT 31 DECEMBER 2014 40,479 365,921 13,407 31,442 25,855 477,104



The following breakdown of the legal reserves applies:

2014 2013

Revaluation reserve 1,258 1,258Currency translation differences -36 -29Cash flow hedge -356 -Software developed 12,541 -

13,407 1,229

The provisions of Part 9, Book 2 of the Dutch Civil Code limit the distribution of dividend and repayment of capital due to the establishment of legalreserves.

10 | PROVISIONS2014 2013

Deferred income tax liabilities 422 670Personnel-related provisions 1,010 894BALANCE AS AT 31 DECEMBER 1,432 1,564

Personnel-related provisions relate to long-service awards, continuation of wage payments during extended periods of illness and wage tax on share-based remuneration payable by the company.An amount of € 472 of the entire provision has a term of less than one year and the term of the remaining € 960 exceeds one year.

11 | NON-CURRENT LIABILITIES2014 2013

Carrying amount of non-current interest-bearing borrowings 485,269 371,645Current portion of non-current borrowings -106,047 -159,728BALANCE AS AT 31 DECEMBER 379,222 211,917

The non-current liabilities are categorised based on maturity as follows:

TOTAL < 1 YEAR 1-2 YEARS 2-5 YEARS

Syndicated revolving credit facility 149,416 - 149,416 -Subordinated credit facility 58,749 - 58,749 -Contingent considerations for acquisitions 5,421 3,347 - 2,074Derivative financial instruments 583 - 475 108Group company loans 271,100 102,700 48,400 120,000

485,269 106,047 257,040 122,182

The credit facilities and contingent considerations for acquisitions are expanded on in the consolidated financial statements (see notes 3 and 20). Groupcompany loans are provided at an annual interest rate of between 1.094% and 2.388%.

12 | CURRENT LIABILITIES2014 2013

Current portion of non-current borrowings 106,047 159,728Trade and other payables 4,180 6,306Debts to group companies 130 117,902BALANCE AS AT 31 DECEMBER 110,357 283,936

13 | EMPLOYEESAt the end of 2014 USG People N.V. employed 29 people (2013: 41), all in the Netherlands.



14 | LIABILITYThe company and many of its Dutch operating companies together form a fiscal unity for VAT and income tax purposes. Each of the operatingcompanies is jointly and severally liable for income tax payable by all companies belonging to the fiscal unity. The company settles the amount ofincome tax with the respective operating companies based on income before tax.The company has issued a notice of liability as referred to in Section 403, Title 9, Book 2 of the Netherlands Civil Code for a number of Dutchsubsidiaries.

15 | AUDIT FEESThe fees of PricewaterhouseCoopers Accountants N.V. and its affiliates in the countries where the group is active are specified as follows for thefinancial years:

2014 2013

Audit of the financial statements 1,260 1,360Other audit procedures 17 25Other non-audit services 17 25

1,294 1,410

The above fees relate to activities performed for the company and consolidated operating companies by audit organisations and independent externalauditors, as referred to in Art. 1, sub 1 of the Dutch Act on the supervision of audit firms (Wta), and the fees charged by the entire network to which theaudit organisation belongs. An amount of € 658 of the € 1,294 (2013: € 697 of the € 1,410) was charged by PricewaterhouseCoopers Accountants N.V.Other non-audit services are permitted under the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten.

16 | REMUNERATION OF THE EXECUTIVE BOARD AND SUPERVISORY BOARDPlease refer to note 27 of the consolidated financial statements for information about the remuneration of the Executive Board and Supervisory Board.This information is deemed to have been included and repeated here through this referral.

Almere, 25 February 2015

Supervisory BoardCees Veerman (chairman)Rinse de JongWillemijn MaasAlex MulderJohnny Thijs

Executive BoardRob Zandbergen (CEO)Leen Geirnaerdt (CFO)



OTHER DATA—

EVENTS AFTER THE BALANCE SHEET DATENo events of interest to the group as a whole took place after the balance sheet date.

PROVISIONS IN THE ARTICLES OF ASSOCIATION REGARDING PROFIT APPROPRIATIONArticle 29 Profit and contributions29.1 Profit distributions can only be made to the extent the company’s equity exceeds the amount of the paid-up and called-up part of the capital plusthe reserves that are to be maintained pursuant to the law or these Articles of Association.

29.2 The first distribution on the preference shares to be made from the profit as shown in the profit and loss account for the most recently endedfinancial year shall be, where possible, the percentage referred to below of the amount that was mandatorily paid on those shares.The percentage referred to above shall be equal to the average of the base refinancing rate of the European Central Bank – weighted according to thenumber of days this interest rate applied – during the financial year or part of the financial year for which the distribution is made, plus an allowance setby the Executive Board and approved by the Supervisory Board in the amount of at least one and a half (1.5) percentage points and with a maximum offour (4) percentage points, depending on the situation at such time. If, in the financial year in which the distribution referred to above is made, theamount mandatorily paid up on the Preference Shares is reduced or, pursuant to a resolution for an additional payment, is increased, the distributionshall be reduced or, if possible, raised, respectively, by an amount equal to said percentage of the amount of the reduction or increase, respectively,calculated as from the time the additional payment became mandatory.

29.3 If and to the extent that the profit is insufficient to make the distribution referred to in Article 29.2 above, the deficit shall be distributed andcharged to the reserves, to the extent this does not involve any actions contrary to the provisions of article 29.1.If and to the extent such a distribution cannot be charged to the reserves, such a distribution shall first be made to the holders of preference sharesfrom the profits earned in subsequent years that the deficit is fully cleared, before the provisions of the next paragraphs of this article 29 can be applied.

29.4 If the profit of a financial year is determined and one or more preference shares were redeemed in that financial year, the parties that were holdersof preference shares as shown in the register of holders of preference shares referred to in article 5.2 at the time of said redemption shall have aninalienable right to profit distribution as described below. The profit that is distributed to said holder(s) if possible shall be equal to the amount of thedistribution, to which he would be entitled pursuant to the right determined above in this article 29, if he had been a holder of the preference sharesreferred to above at the time the profit was determined, to be calculated time-proportionately for the period that he was a holder of these preferenceshares in said financial year, which distribution shall be reduced by the amount of the distribution that was made in accordance with the provisions ofarticle 29.10.If, in the course of any financial year, preference shares were issued, the dividend on the relevant preference shares for that financial year shall bereduced proportionately until the relevant day of issue.

29.5 No distributions shall be made on the preference shares other than as provided for in this article 29 and in article 37.

29.6 Subject to the approval of the Supervisory Board, the Executive Board shall determine what part of the profit remaining after application of theprovisions of the preceding paragraphs of this article 29 is to be reserved.

29.7 The remaining profit shall be at the disposal of the General Meeting of Shareholders

29.8 Provided that an interim statement of assets and liabilities signed by the Executive Board evidences that the requirement referred to in article 29.1concerning the capital position has been satisfied, the Executive Board may make one or more interim distributions to the holders of ordinary sharesand/or the holders of preference shares with the approval of the Supervisory Board, with due observance, however, of the maximum referred to inarticles 29.2, 29.3 and 29.4.

29.9 Subject to the approval of the Supervisory Board, the Executive Board is authorised to determine that a distribution on ordinary shares will not bemade in cash but in the form of ordinary shares, or to determine that holders of ordinary shares may choose to accept the distribution in cash and/or in

other data


the form of ordinary shares, all this from the profit and/or from a reserve and all this to the extent the Executive Board has been designated by theGeneral Meeting in accordance with articles 7.1 and 7.3. Subject to the approval of the Supervisory Board, the Executive Board shall set the conditionsunder which such a choice may be made.

29.10 In the event that preference shares are redeemed, a distribution shall be made on the cancelled preference shares on the day of redemption,which distribution shall be calculated as much as possible in accordance with the provisions of articles 29.2, 29.3 and 29.4, on the period for which nodistribution referred to in article 29.2, first sentence, has yet been made until the day of redemption, all this provided that the requirement in article 29.1has been satisfied, which must be evidenced by an (interim) statement of assets and liabilities drawn up in accordance with the provisions prescribed bylaw.

Article 30 Release for payment. Entitlement30.1 Dividends and other distributions shall be made payable within four weeks after adoption, unless the General Meeting determines another date atthe proposal of the Executive Board. Different payment release dates may be designated for the ordinary shares and the preference shares.

30.2 A deficit may only be offset against the reserves prescribed by law to the extent this is permitted by law.

PROFIT APPROPRIATIONThe Executive Board proposes to distribute a dividend of € 0.16 per ordinary share, payable in cash. Based on 80,957,360 shares this amounts to a totaldividend distribution of € 12,953. The difference between the net income of € 25,855 and the proposed dividend distribution, being € 12,902, will beadded to reserves.

other data


INDEPENDENT AUDITOR'S REPORTTo: the general meeting and supervisory board of USG People N.V.

REPORT ON THE FINANCIAL STATEMENTS 2014Our opinionIn our opinion:• the consolidated financial statements give a true and fair view of the financial position of USG People N.V. as at 31 December 2014 and of its result

and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS)and with Part 9 of Book 2 of the Dutch Civil Code;

• the company financial statements give a true and fair view of the financial position of USG People N.V. as at 31 December 2014 and of its result forthe year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have auditedWe have audited the financial statements 2014 of USG People N.V., Almere (‘the company’). The financial statements include the consolidated financialstatements and the company financial statements.

The consolidated financial statements comprise:• the consolidated balance sheet as at 31 December 2014;• the following statements for 2014: the consolidated income statement and the consolidated statements of comprehensive income, changes in equity

and cash flows; and• the notes, comprising a summary of significant accounting policies and other explanatory information.

The company financial statements comprise:• the company balance sheet as at 31 December 2014;• the company income statement for the year then ended; and• the notes, comprising a summary of the accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is EU-IFRS and the relevant provisions of Part 9of Book 2 of the Dutch Civil Code for the consolidated financial statements and Part 9 of Book 2 of the Dutch Civil Code for the company financialstatements.

The basis for our opinionWe conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are furtherdescribed in the “Our responsibilities for the audit of the financial statements” section of our report.

We are independent of USG People N.V. in accordance with the “Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten”(ViO) and other relevant independence requirements in the Netherlands. Furthermore, we have complied with the “Verordening gedrags- enberoepsregels accountants” (VGBA).

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approachOverviewWe designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we lookedat where the executive board made subjective judgements, for example in respect of significant accounting estimates that involved making assumptionsand considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internalcontrols, including evaluating whether there was evidence of bias by the executive board that may represent a risk of material misstatement due tofraud. Based on the nature of the organisation we tested the reconciliation of hours paid (payroll) and hours billed at all entities.

other data


Materiality• € 2,000,000, which represents 2.5% of profit before interest, tax, depreciation and amortisation.

Audit scope• we performed a full scope audit on the financial information of 18 components, where six are considered

significant. In addition, we performed a review on the financial information of one component and specificaudit procedures for a further five components.

• as a consequence of the company using shared service centres, for several entities we audited a number ofprocesses centrally.

• we visited the auditors in the Netherlands, Germany and Belgium this year.

Key audit matters• valuation of goodwill• valuation of the deferred tax assets• the recognition and presentation of claims and legal cases• compliance with laws and regulations relating to salaries of direct employees

MaterialityThe scope of our audit is influenced by the application of materiality. Our audit opinion aims on providing reasonable assurance about whether thefinancial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered to be material if,individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financialstatements.

We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the nature, timing andextent of our audit procedures and to evaluate the effect of identified misstatements on our opinion.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall group materiality € 2,000,000 (2013: € 1,900,000).How we determined it 2.5% of profit before interest, tax, depreciation and amortisation.Rationale for benchmark applied We have applied this benchmark based on our analysis of the common information needs of users

of the financial statements. On this basis we believe that profit before interest, tax, depreciationand amortisation is an important metric for the financial performance of the company.

We also take (possible) misstatements into account that, in our judgment, are material for qualitative reasons, for example the disclosure ofremuneration of the executive board.

We agreed with the audit committee that we would report to them misstatements identified during our audit above € 100,000 (2013: € 95,000) as well asmisstatements below that amount that, in our view, warranted reporting for qualitative reasons.

other data


The scope of our group auditUSG People N.V. is head of a group of entities. The financial information of this group is included in the consolidated financial statements of USG PeopleN.V.

Considering our ultimate responsibility for the opinion on the company’s consolidated financial statements we are responsible for the direction,supervision and performance of the group audit. In this context, we have determined the nature and extent of the audit procedures for components ofthe group to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole. Determining factors are thegeographic structure of the group, the significance and/or risk profile of group components or activities, the accounting processes and controls, and theindustry in which the group operates. On this basis, we selected group components for which an audit or review of financial information or specificbalances was considered necessary.

The group audit focused on the significant components in the Netherlands, Belgium, France and Germany. For those components audit work wasperformed by PwC Netherlands and foreign PwC offices based on our audit instructions.

Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those functionsto be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the group financial statements as awhole. The group engagement team visits the component teams on a rotational basis. This year we visited the Netherlands, Germany and Belgium.Besides we discussed with our colleagues about the audit approach and audit findings during the audit on several instances and we reviewed workingpapers of several specific parts of the audit performed locally.

The group consolidation, financial statement disclosures and a number of items are audited by the group engagement team at the head office. Theseinclude, the valuation of goodwill, the valuation of the deferred tax assets and the recognition of business combinations, derivatives and share basedpayments.

By performing the procedures above at components, combined with additional procedures at group level, we have obtained sufficient and appropriateaudit evidence regarding the financial information of the group as a whole to provide a basis for our opinion on the consolidated financial statements.

Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements. We havecommunicated the key audit matters to the audit committee and supervisory board, but they are not a comprehensive reflection of all matters that wereidentified by our audit and that we discussed. We described the key audit matters and included a summary of the audit procedures we performed onthose matters.

The key audit matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon. We do notprovide a separate opinion on these matters.

other data


Key audit matter How our audit addressed the matter

Valuation of goodwillRefer also to note 13 in the financial statementsThe recognised goodwill of € 683 million in the balance sheet is one of themost significant assets of USG People N.V. The annual impairment test is,to a large extent, based on estimates of management relating to theassumptions of the forecasted cash flows. Those assumptions include,among others, the expectation of future revenues, development of grossmargins and the general development of markets and economiccircumstances. Because of the above mentioned assumptions thevaluation of the goodwill is a key audit matter in our audit. Based on thegoodwill impairment test the executive board concluded that noimpairment is necessary. The most important assumptions and sensitivityanalysis are disclosed in note 13 of the financial statements.

Our audit procedures included, among others, verifying the mathematicalaccuracy of the calculations and the basis of the assumptions, under whichthe discount rate was applied. We used internal valuation specialists forthis purpose. The examination of the assumptions with respect to theexpected development in revenues, gross margins and operating costswere part of our audit procedures. We tested the assumptions amongothers by means of comparison with the historic performance of thecompany and the growth expectation from external parties for thecountries in which USG People is doing business. We also verified thecompleteness of the disclosures of the assumptions and sensitivityanalysis in note 13 of the financial statements for possible situations thatcould lead to an impairment. In particular, we paid specific attention to thegoodwill of € 97 million of the segment - ‘Germany Specialists’ since thesensitivity for an impairment in this segment is high.

Valuation of the deferred tax assetsRefer also to note 11 in the financial statementsThe executive board made an estimate of the recoverability of thedeferred tax assets, based on the forecast for the next few years andtaking into account the time to settle those losses in the variousjurisdictions. Based on this estimate deferred tax assets of € 49.9 millionare recognised. The valuation of the deferred tax assets is a key auditmatter because it is of material importance for the financial statementsand based on estimates and assumptions about future profitability whichmay differ in reality.

We verified the consistency of the underlying forecasts with the yearlygoodwill impairment test. In addition we performed procedures on, amongothers, the accuracy and completeness of the fiscal losses per entity, thesettlement terms in the various tax jurisdictions and the completeness ofthe disclosures in the financial statements. In particular, we paidspecific attention to the deferred tax assets of € 19.1 million in Germany,also given the recognised impairment in 2014.

The recognition and presentation of claims and legal casesRefer also to note 23 and 29 in the financial statementsUSG People N.V. received and made material claims and legal cases from,and to, third parties, as disclosed in note 23 and 29 of the consolidatedfinancial statements. Provisions or contingent assets and liabilities arerecognised for these claims in the financial statements. The recognitionand presentation of claims and legal cases are a key audit matterbecause they are material and the executive board makes estimates onthe legal position and the subsequent recognition in the financialstatements. For this purpose they use external legal advisors. The numberof claims and legal cases decreased in 2014 compared to 2013. Theuncertainty of several claims and disputes decreased in the second halfof 2014 due to court rulings and negotiation with counterparties.

We examined the estimates of the executive board for the claims and legalcases as disclosed in note 23 and 29, among others, with correspondenceof the legal counterparties, court rulings, minutes of meetings and externallawyers letters. Where necessary, we used specialists of PwC.

We verified that the estimates of the executive board in 2013 with respectto the claims and legal cases that were finalized in 2014, were in line withthe outcome in 2014 or deviated to a limited extent, except for the claimwith respect to guarantees relating to the sale of subsidiaries in the past,as disclosed in note 23 of the financial statements.

Compliance with laws and regulations relating to salaries of directemployeesBecause of the increasing number of changes in each country in whichUSG People NV is operating, compliance with laws and regulationsrelating to wage tax, subsidies on wage tax, social security charges andcompliance with collective labour agreements has become more complex.Minor errors in the calculation of expenses and payments of wage tax andother payroll related charges may have a material impact on the financialstatements. Compliance with laws and regulations relating to theremuneration of direct employees is therefore a key audit matter in ouraudit.

We performed audit procedures on, among others, the effectiveness ofinternal controls around the timely and accurate processing of changes inlaws and regulations, the accuracy of the net salary calculations and theaccuracy and completeness of fiscal tax returns of wage tax and socialsecurity charges. We used specialists within PwC to perform theseprocedures. We also obtained and reviewed correspondence with fiscalauthorities and tested the reconciliation between the salary administrationand the finance administration.

other data


Responsibilities of the executive board and the supervisory boardThe executive board is responsible for:• the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 of Book 2 of the Dutch Civil Code, and

for the preparation of the report of the executive board in accordance with Part 9 of Book 2 of the Dutch Civil Code, and for• such internal control as the executive board determines is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, the executive board is responsible for assessing the company’s ability to continue as a goingconcern. Based on the financial reporting frameworks mentioned, the executive board should prepare the financial statements using the going concernbasis of accounting unless the executive board either intends to liquidate the company or to cease operations, or has no realistic alternative but to doso. The executive board should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a goingconcern in the financial statements.

The supervisory board is responsible for overseeing the company’s financial reporting process.

Our responsibilities for the audit of the financial statementsOur responsibility is to plan and perform an audit engagement to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. Ouraudit has been performed with a high but not absolute level of assurance which makes it possible that we did not detect all frauds or errors.

A more detailed description of our responsibilities is set out in the appendix to our report.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSOur report on the report of the executive board and the other informationPursuant to the legal requirements of Part 9 of Book 2 of the Dutch Civil Code (concerning our obligation to report about the report of the executive boardand other information):• We have no deficiencies to report as a result of our examination whether the report of the executive board, to the extent we can assess, has been

prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required by Part 9 of Book 2 of the Dutch Civil Code hasbeen annexed.

• We report that the report of the executive board, to the extent we can assess, is consistent with the financial statements.

Our appointmentWe were appointed as auditors of USG People N.V. on 8 May 2013 for the years 2013, 2014 and 2015 by the supervisory board following the passing of aresolution by the shareholders at the annual meeting held on 8 May 2013. PwC is now auditor representing a total period of uninterrupted engagementof more than 10 years. The most recent rotation of the signing external auditor was in 2014. Rotation of the signing external auditor is one of oursafeguards to maintain our audit independence. As of book year 2016 the financial statements of USG People N.V. will be audited by another externalaudit firm.

Amsterdam, 25 February 2015PricewaterhouseCoopers Accountants N.V.

Official Dutch version signed by E. Hartkamp RA

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Appendix to our auditor’s report on the financial statements 2014 of USG People N.V.In addition to what is included in our auditor’s report we have further set out in this appendix our responsibilities for the audit of the financialstatements and explained what an audit involves.

The auditor’s responsibilities for the audit of the financial statementsWe have exercised professional judgment and have maintained professional scepticism throughout the audit in accordance with Dutch Standards onAuditing, ethical requirements and independence requirements. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud or error. Our audit consisted, among others of:• Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing

audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the intentional override of internal control.

• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by theexecutive board.

• Concluding on the appropriateness of the executive board ’s use of the going concern basis of accounting, and based on the audit evidence obtained,concluding whether a material uncertainty exists related to events and/or conditions that may cast significant doubt on the company’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the relateddisclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report and are made in the context of our opinion on the financial statements as a whole. However, futureevents or conditions may cause the company to cease to continue as a going concern.

• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and evaluating whether thefinancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings,including any significant deficiencies in internal control that we identify during our audit.

We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.

From the matters communicated with the supervisory board, we determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

other data


DividendThat part of net income paid out to shareholders.

DSO (days sales outstanding)Measure of the age of trade receivables, expressed as the average number of days that receivables are outstanding.

EBITAOperating income before amortisation and impairment of acquisition-related intangible assets.

EBITA-margeEBITA as a percentage of revenue.

EBITDAOperating income before depreciation, amortisation and impairment of acquisition-related intangible fixed assets.

Financial derivatesFinancial instruments to cover financial risks. The value is derived from the development of the underlying value such as interest or foreign currency.

Gross marginGross profit as a percentage of revenue.

Gross profitRevenue minus cost of sales.

Net financial debtInterest bearing debt minus cash and cash equivalents

Net incomeResult attributable to shareholders.

Operating cash flowCash flow from operating activities including tax.

Operating expensesSelling, general and administrative expenses and other income and expenses.

Operating incomeIncome before finance costs and income taxes.

FINANCIAL GLOSSARY—


USG PEOPLE N.V.P.O. box 11300 AA Almere

P.J. Oudweg 611314 CK Almerethe Netherlands

+31 (0)36 529 95 [email protected]

DESIGNCommond - Content for brands

REALISATIONTangelo Software

PHOTOGRAPHYHans-Peter van Velthoven

TRANSLATIONAbacus Translation

FINAL EDITINGUSG People N.V.Corporate Communication & Investor Relations

COLOPHON—


mailto:[email protected]

http://www.usgpeople.com/

2014 annual report - jaarverslag · 2014 annual report _ usg people n.v. 7 2014 was a year of...

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