annual report - jaarverslag · forward-looking statement this annual report contains certain...

201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012201220122012ANNUAL REPORT

Cover photoFrans Lubeck Sector Manager Business Services Start People, the Netherlands

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-looking statements 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, mergers and 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 guarantees for the future. The annual report is available in Dutch and English. The English version is a translation of the Dutch version. In the event of ambiguities, the Dutch text shall prevail.

ANNUAL REPORT 2012

INDEX

PREFACE & ORGANISATIONCEO’S PREFACE

PROFILE

HUMAN RESOURCES

KEY FIGURES

USG PEOPLE AT A GLANCE

SOCIAL RESPONSIBILITY

HR KEY FIGURES

INFORMATION ON THE SHARE

TRUSTEE REPORT

FINANCIAL CALENDAR

FORWARD LOOKING STATEMENT

004

007

016

018

019

022

026

028

031

031

001

REPORTS REPORT OF THE SUPERVISORY BOARD

REPORT OF THE EXECUTIVE BOARD

Financial section

Development in the divisions

Risk section

Corporate governance

Outlook

032

048

052

060

066

070

076

004

032

001

INDEX 003

OTHER DATA Events after balance sheet date

Provisions in the articles of association regarding

profit appropriation

Profit appropriation

Independent auditor’s report

TEN-YEAR OVERVIEW

FINANCIAL GLOSSARY

COLOPHON

146

078

FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet as at 31 December

Consolidated statement of change in shareholders’ equity

Consolidated statement of cash flows

Notes to the consolidated financial statements

COMPANY FINANCIAL STATEMENTS

Company income statement

Company balance sheet at 31 December (before profit appropriation)

Notes to the company income statement and balance sheet

080

080

080

081

082

083

084

134

134

134

135

146

146

147

148

150

152

153

PREFACE & ORGANISATION

This year we celebrate our company’s forty-year anniversary. In the past forty years our organisation went through many changes, growing from a single Unique branch on the Keizersgracht in Amsterdam into one of the largest providers of staffing services in Europe. And now we are once again seeing significant changes in the world around us – trends that offer new opportunities for the further development of our organisation.

Even though the day-to-day operation of the organisation requires a great deal of effort in the current market conditions, we are now – more than ever – focused on the future and creating value for the longer term.

2012 was once again a challenging year from a macroeconomic perspective. The European debt crisis continued to linger and the growth in global trade slowed further. Consequently, unemployment rose to an exceptionally high level, particularly in countries in

ORGANISATION&PREFACE

CEO’S PREFACE

005

southern Europe such as Spain, Italy and Greece. A point of particular concern that warrants attention is that this rise is accompanied by extremely high youth unemployment.

The uncertain situation and economic slowdown also had an impact on the European markets in which we operate and on our group’s revenue. The volumes achieved in temporary staffing markets decreased throughout the year, resulting in a decline in revenue at our companies operating in general and specialist staffing. Demand from the labour market was in decline particularly in the less highly educated segments. Certain higher-educated profiles were still in demand and this trend is expected to continue. That is why Professionals, the division that provides staffing solutions for clients in need of highly qualified professionals, was able to grow in 2012.

Total revenue of the USG People group declined 11% to € 2.9 billion in 2012. Underlying EBITA was also down 14% to € 82 million. The decline in underlying EBITA remained limited due to the highly proactive and effective manner in which operating expenses were managed. Being able to keep capacity and operating expenses in line with economic fluctuations largely determines our short-term performance. We were quite successful at doing so in 2012. Our long-term value creation is expressed by the extent to which we succeed in achieving our strategic objectives.

Strengthening our leading positions is one of our strategic objectives. In 2012 we took a number of measures to further develop our fundamental building blocks. Continuous improvement programmes were launched within our operating companies and shared service centres. These programmes further strengthen our competitive position by improving the quality of our services at a lower cost level (thus increasing operational excellence). The international governance model that we implemented after reassessing our strategy at the end of 2011 has encouraged sharing best practices and harmonising our concepts across national borders. For all our international brands distinguishing features are outlined which are the basis of the further unification of our concepts in different regions. This results in more effective and efficient processes and a harmonised and recognisable positioning in every region.

Furthermore each of our three divisions – General Staffing, Specialist Staffing and Professionals – launched pilots to improve our commercial organisation. This concept involves technological applications and the functionality of physical branches operating in unison when recruiting candidates and providing services to our clients. The initial results of the pilots are extremely encouraging. The concept will be reviewed and further developed in 2013.

In the past year we created a distinct new, single international brand structure for our Professionals division. The brands are linked to the specific fields in which they operate and are visually unified under the overriding USG Professionals brand. The new brands will be introduced early in 2013 with the help of a distinct international advertising campaign.

This past year also saw us launch innovative initiatives in the field of sustainability, including the introduction of the ‘green’ flex worker. Our SR strategy has now been translated into an implementation plan to embed SR throughout our operations. This edition of the annual report features a SR report to stress the importance of corporate social responsibility as an area of attention in our organisation.

One of USG People’s other strategic objectives is to expand the high-yield concepts, particularly in the professionals segment. In 2012 we made various efforts to do this. One was the acquisition of Control Finance, a Dutch organisation specialised in providing staffing solutions for financial professionals. The acquisition took place in April and filled a major gap in the road map for the Professionals division, which is now able to provide services in every chosen area of expertise in the Dutch market.

Another development was to expand the services of USG Legal Professionals and Secretary Plus – two of USG People’s successful concepts in the Netherlands and Belgium – in countries outside of the home markets. USG Legal Professionals has been launched in Luxembourg, France, Switzerland and Germany, while Secretary Plus expanded mainly in Germany. This expansion also served to support USG People’s third strategic objective of expanding our exposure in growth markets. The markets outside of the Benelux are still largely focused on traditional staffing. These markets are less mature in the field of high-value staffing solutions in the respective areas of specialisation, meaning that they are classed as growth markets with high growth potential.

In the meantime we are navigating through an unusually long and persistent adverse economic period and are continuing to execute our strategic plans unabated. And we are continuing to work towards a beautiful future for our forty-year-old organisation. Our people continue to make the difference, regardless of the changes we encounter along the way. I firmly believe this and want to thank all our employees for their efforts and commitment.

Rob Zandbergen, Chief Executive Officer27 February 2013

OUR VISION

Our aim is to hold a leading position in the markets we have selected. USG People’s core activities provide a robust basis and unique starting point to support this objective. Our specific focus on small and medium-sized enterprises, in management support, administrative and technical positions, and our established positions for professionals lend themselves well to further internationalisation and growth, both organic and through acquisitions. Using our know-how we expand on our leading positions in these specific markets and niche markets and create added value for all our stakeholders. Innovation and new ways of working help our organisation continue to develop and make it more sustainable.

OUR MISSION

People make the difference, each with their own unique talent and passion.

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

We use our know-how to help our clients connect with the best candidates which, in turn, allows them to operate as effectively as possible in the market with well-qualified employees. The market is constantly changing under the influence of economic

developments, on the one hand, and the availability of qualified employees, on the other.

We do not believe in a one-size-fits-all concept, but in talented people who can make a difference when they are employed in the right place. It is this combination that enables us to attract the best candidates and connect them to the right jobs.

STRATEGY

USG People has a distinct portfolio of specialist brands and tailored business models, with each brand serving a specific market segment. Our focus, organisation and brands are aligned as best as possible with the trends in our industry and the needs of candidates and clients in an ever-changing labour market. Our organisation adopts separate business models that are specifically tailored to the dynamics of the various chosen markets. USG People identifies the following three divisions*.

Throughout the years USG People has built up a wide range of extensive knowledge of the various staffing markets. We have distinct positions in the three aforementioned divisions.

USG People aims to achieve leading positions in select markets, such as a certain region, a specifically targeted group of clients (e.g. SMEs) or a targeted group of candidates (in a certain field). We particularly want to expand our positions in high-yield markets that offer good growth perspectives, whereby we invariably aim to balance short and long-term profitability with value creation.

PROFILE

2. SPECIALIST STAFFING

1. GENERAL STAFFING

DIVISION FOCUS AREA

Providing flexibility in capacity (volume placement).

Providing flexible capacity for the SME segment (small-scale placement). Providing temporary qualified management assistants, office personnel and technical staff (individual placement).

Providing high-quality HR solutions in the fields of engineering, ICT, legal, finance, HR, science and marketing, communication & sales by deploying highly-qualified professionals on a temporary, interim or project basis.

*


3. PROFESSIONALS

007

Strategic objectives1. Expand leadership positions in select markets USG People holds a leading position in General Staffing, Specialist Staffing and Professionals. In the general staffing market Start People holds a leading position in the Benelux. Start People is also active in six European countries outside the Benelux where it is positioned in select regions with a high degree of economic activity. Unique (Specialist Staffing) has a distinct position in the Benelux as the SME market specialist and an attractive market position in countries like Germany and Italy with their promising SME segments. In addition the Specialist Staffing brands Secretary Plus and Technicum have very distinct, leading positions in their niche markets, particularly in the Netherlands and Belgium. The USG Professionals brands hold particularly strong positions in the Benelux. In attractive areas of expertise, such as engineering and legal, they are among the most established players.

USG People is constantly aiming to strengthen its competitive position, by continually developing and improving its services through operational excellence and the further development of online applications. And by strengthening our ability to be distinct and recognisable by harmonising and expanding cross-border opportunities.

2. Strengthen position in growth markets USG People wants to strengthen its position in markets that offer attractive growth perspectives for high-yield activities. USG People aims to achieve this through the cross-border rollout of concepts that have proved successful and complement this with acquisitions in focus areas with attractive growth perspectives. Acquisitions will be focused on select areas of expertise within Professionals and high-yield concepts within Specialist Staffing, while General Staffing aims to achieve further organic growth in promising areas using its existing network.

3. Focus investment on high-yield concepts USG People aims to expand its Specialist Staffing and USG Professionals activities internationally. These brands have an extremely strong image among clients and candidates alike, and are highly attractive for qualified candidates. USG People has successful concepts in these divisions that are characterised by their high added value. Throughout the years a strong foundation with a great deal of expertise has been built within the organisation, particularly in the Netherlands and Belgium. The external factors that contribute to the successful operation of these activities are not fundamentally different in other European countries. By investing in organic growth and acquisitions, the contribution these activities make to group earnings will accelerate.

Financial targets1. 6.0% average EBITA marge throughout the cycle For the medium term USG People aims to achieve an average EBITA margin of 6.0% throughout the cycle. The following medium-term targets apply for the EBITA margin at the divisions: General Staffing 5.0%, Specialist Staffing 7.5%, Professionals 10.0%.

USG People achieves these targets through structurally efficient operations and effective cost flexibility. In addition, a relative growth in high-yield activities will improve the profit margin, in line with the strategic objectives.

2. Maximum leverage ratio of 2.0USG People is committed to maintaining a sound financial position and in time aims for its debt position to not exceed 2.0 times underlying EBITDA.

Strategic building blocksThe strategy defines five building blocks that together form the framework from within which we strive to achieve our core strategic objectives.

1. Distinct brands Our market approach is based on a clear, effective and recognisable segmentation of the market, within which we operate with five international brands. This enables us to provide specific solutions that meet the different needs of candidates and clients.

2. Strengthen competitive position USG People is constantly investing in its positioning by adjusting the quality and effectiveness of its organisation and processes, for example by applying new technology. These investments strengthen the competitive position of our organisation. Tailored operational concepts help the three divisions achieve a focused and distinct position in their market segment. In recent years large steps have been taken that have improved the quality of major aspects of the business, while at the same time structurally lowering operational costs.

3. Effective business modelsUSG People distinguishes and develops business models that are effectively tailored to the three different disciplines. The General Staffing organisation is focused on the placement of large numbers of flex workers, mostly with large companies, whereas the organisation of Specialist Staffing is more geared to individual placements and local presence. The Professionals model is based on expertise in specific high-value areas of expertise.


4. Tailor-made operational concepts The concepts for the international brands and the operational processes are being aligned. This strengthens the shared focus and international character and makes the organisations more transparent and efficient.

More and more people who are looking for a job initiate contact with the USG People operating companies via the internet, meaning that good online facilities are increasingly important and operational concepts have to evolve accordingly. The internet is gradually taking over certain roles from the traditional network of physical branches. Nowadays an effective network consists of a mix of physical branches and an internet platform. USG People is highly active in responding to the increasing importance of the

internet through the constant development of the functionality of the online platform to actively recruit candidates.

5. International brand governance USG People’s international brand governance model ensures effective harmonisation and promotes the sharing and application of best practices as well as the realisation of shared objectives across national borders. The result is a broad and better basis for international services. USG People aims to expand its international range of distinct concepts.

Within this context the centralised responsibility and governance of the support services at the Shared Service Centers provides additional efficiency improvements in the back office processes.

EXPAND LEADERSHIP POSITIONS IN SELECTED

MARKETSSTRENGTHEN POSITION IN

GROWTH MARKETSFOCUS INVESTMENT ONHIGH-YIELD CONCEPTS

improved onlinecapabilities

unified conceptsacross countries

PROFESSIONALS

FOCUSED CAPITAL ALLOCATION

operationalexcellence

more cross-bordercapabilities

GENERAL STAFFING SPECIALIST STAFFING

TAILORED OPERATIONAL CONCEPTS

distinct brands effective business modelscompetitive edge

INTERNATIONAL GOVERNANCE

009

ES

FR

8

473Revenue

152Branches

514Indirect ftes

Revenue

3Branches

16Indirect ftes

130Branches

353Revenue

391Indirect ftes

206Branches

534Revenue

1,244Indirect ftes

200Revenue

80Branches

320Indirect ftes

Belgium

Luxembourg

France

Spain

NetherlandsAt the end of 2012 Start People consisted of a network of 610 branches and 2,709 FTEs. Start People’s core activity is providing flexible staffing capacity to companies – through the placement of temporary employees – as well as providing outsourcing and payroll services. Start People mainly places large numbers of temporary employees at large companies and is strongly positioned in the public sector and transport sector.

Strategic focus• focusonoperationalexcellenceof core activities;• organicgrowthwithintheexisting branch network;• constantlyimproveefficiency and productivity.

GENERAL STAFFING

BE

LU

NL

CH AT

PLDE


22Revenue

8Branches

28Indirect ftes

50Revenue

8Branches

59Indirect ftes

34Revenue

23Branches

137Indirect ftes

Austria PolandSwitzerland

REVENUE 2012

€ 1,674 MILLION

011

Specialist Staffing consists of three international brands: Unique, Secretary Plus and Technicum. Each of these labels devotes special attention to the coaching of candidates and the development of their skills. Unique is focused on providing flexible staffing capacity to the SME segment. Unique sets itself apart in the personal relationships it maintains with its local clients which enables it to understand their needs better than anyone and to provide the most suitable candidates. Technicum provides technical staff for the construction and technical segments. Secretary Plus provides staffing solutions in the wide

field of management support. Within Specialist Staffing the international brands are joined by a number of brands* in the Netherlands that have positioned themselves locally throughout the years. These brands make a major contribution to the returns in the Netherlands and the wide spread of activities.

Strategic focus• fullyfocusedonspecialistactivities;• growththroughexpansionandtherolloutofcorespecialisms;• investmentintheexpansionofhigh-yieldactivitiesisapriority.

REVENUE 2012

€ 973 MILLION

SPECIALIST STAFFING


“EACH OF THESE LABELS DEVOTES SPECIAL ATTENTION TO THE COACHING OF CANDIDATES

AND THE DEVELOPMENT OF THEIR SKILLS”

8%Technicum

Revenue

116Indirect ftes Current countries

NL, DE

67%Unique

Revenue

1,317Indirect ftes Current countries

NL, BE, DE, IT 8%Secretary Plus

Revenue


NL, BE, DE, FR, AT, ES, CH, IT

Current countries

NL17%Local brands:* ASA Call-IT Creyf’s Vakcollege

Revenue

469Indirect ftes

013

PROFESSIONALS

The Professionals activities are combined in an umbrella brand which will include all USG People activities geared towards professionals. As a result the brands are positioned as one in the market with strong ties between them, while their distinct image, recognisability and the nature of their different fields of expertise remain. The combined entity has more substance and a more widely spread position and profile for clients while the specific image of the individual brands has a strong attraction for

professionals. Professionals provides high-quality HR solutions in the highly educated segment in the fields of engineering, ICT, legal, finance, HR, science and marketing, communication & sales. It is focused on carefully selected qualified profiles and sets itself apart through its professional and knowledge-intensive image as well as the strong and personal relations it maintains with the professionals.


REVENUE 2012

€ 229 MILLION

Strategic focus• focusonexpandingservicesinselectareas;• growththroughtherolloutofcoreactivities and acquisitions;• investmentsinexpansionofhigh-yieldgrowthmarkets.

4%Marketing, Communication & Sales

Revenue


NL, BE

27%Other

Revenue


NL, BE

1%Science

Revenue


BE

2%HR

Revenue


BE

9%Legal

Revenue


NL, BE, DE, FR, CH

12%ICT

Revenue


NL, BE

11%Finance

Revenue


NL, BE, FR

34%Engineering

Revenue


NL, BE

015

HUMAN RESOURCES The longer the recession lasts, the more organisations look for a solution by reducing costs. Staff reductions are therefore an increasingly common item on the news as companies aim to be ‘lean and mean’. At the same time companies have to work more efficiently to maximise their added value which, in turn, increases the workload of the group of employees still employed at the company.

Investments are made in the employees by means of skill development or training in order to optimise the added value. This is also what today’s employee is looking for: an interesting job or project where the person can grow and which also helps open the door to possible interesting potential projects in the future.

These are two key priorities for organisations in 2013 and they also apply to USG People. Right now the most important HR duties are reducing costs and attracting and retaining talented employees. Then comes the sustainable deployment and flexibility of staff. These priorities are steered by an HR strategy aimed at finding a balance between input and output and between reducing costs and investing in the added value of employees.

HR – HARDWARE AND SOFTWARE SIDE

The call from within the organisation to make staff more flexible has resulted in other requirements being placed on HR and HR products than was previously the case. This is no different at USG People. This requires a rapid professionalisation of HR as well as improved HR technology, while there is a trend towards a more centralised form of HR, structured by specialism. All these aspects were shaped in 2012. Here too, the key word is ‘balance’. HR ‘hardware’ is now an integral part of the ‘software’ side of HR. ‘Software’ aspects such as training and development are now forever linked to ‘hardware’ aspects such business cases, Return on Investment and Key Performance Indicators. Productivity in particular is becoming increasingly prominent. In other words HR is becoming more and more business-oriented, although USG People must not lose sight of the software side.

TALENT

In 2012 USG People made every effort to discover its talents and, in doing so, find out who is crucial to achieving our strategic objectives. By focusing on retaining or attracting the right employees, we are

able to be more competitive and to perform better across the board.Consequently the HR department is becoming more and more crucial in providing the precise information the organisation needs to steer it in the right direction. USG People will continue to invest in the development of talent. For we believe that increasing their added value is good for them, which in turn allows us to be and continue to be an attractive employer. And we also believe that this increased added value is crucial in making the difference with our competitors. Four aspects must at all times be kept in mind:

• talentmanagementmustbe in linewith thebusinessplans of the operating companies and the individual’s own personal growth objectives. Otherwise it is impossible to create value; • thequalityandquantityofthetalentpoolmustbebasedon the future and not on past needs;• talent should be deployed to areas where business value needs to be created. The right person at the right place;• added value must continue to be measured. Employee ROI must always be a leading factor.

BUSINESS PRINCIPLES

Important aspects of the revised strategy are to increase our focus and to take better advantage of existing ties. After all, being connected and focused – and in doing so achieving our strategic objectives – is also achieved by sharing joint morals and values. This is also why we decided to revise the USG People business principles and to make them apply to everyone in every country and at every operating company. This process, which started in 2012, does not mean however that the operating companies may not have the ability to be distinctly individual. The differences between the operating companies are in fact what make our multibrand strategy strong. But we believe that we will feel even more connected with each other if we all have the same morals and values, and that we will therefore be able to work together even better and focus more on what we are good at.

The business principles provide an account of the desired behaviour of everyone within our organisation and therefore have a large influence on our business culture. A culture that is in keeping with our strategic objectives contributes to commercial success and with it financial success, high employee satisfaction and an increased ability for the organisation to be distinct.

The well-known business principles represent our moral compass and indicate the way of working we promote and aim to achieve. They act as a guide for the leadership style of all management and the services we provide to our clients. In doing so, the business principles form the basis of our commercial success.


The business principles will be implemented in three stages in 2013:

• thepreparationstage:theorganisationisinformedandmade aware of the new set of principles;• theimplementationandacceptancestage:allemployeesand managers understand, accept and have a positive perception of the revised business principles;• the control and commitment stage: everyone has adopted the business principles, acts accordingly and is judged on their adherence to them.

THE FUTURE OF HR

Human Resource Management once again faces a challenging time. There are various aspects which HR will have to take a leading role in. These include dealing with potential shortages on the labour market, the ageing population, dejuvenation, making the employee base more flexible, embedding Social Responsibility into the HR policy, diversity and New Ways of Working. At the same time the distance between managers and employees is narrowing due to increasing levels of education. This growing degree of professionalisation will have to be responded to. After all it has consequences for the way that management can and will have to deal with it (servant leadership) and for the types of contracts that are offered (performance-based contracts).

Furthermore HR will increasingly have to find a way to fit in people who do not have a formal employment contract with the organisation but who do work for it (e.g. self-employed people with no staff). They too will have to be motivated and developed, and that means that HR will have to look beyond our own organisation.

USG People is adjusting its priorities accordingly to be able to meet the future head on!

EMPLOYEE PARTICIPATION

The Central Works Council in the Netherlands met 15 times in 2012, of which 8 times with the CEO. The topics discussed included:

• restructuringtheFinanceandHRorganisations;• therequestfortheInternationalFrontOffice;• theacquisitionofControlFinance;• theremunerationpolicyfor2013;• thebrandstrategy;• dynamicpricing;• developmentsintheNetherlands;• thequarterlyoperatingresults.

017

In thousands of euros unless otherwise stated 2012 2011

Revenue 2,876,204 3,244,772EBITA 65,575 31,810Operating income -164,525 -4,386Depreciation and impairments of property, plant and equipment 12,321 17,939Amortisation and impairments of intangible assets 241,280 49,866Operating cash flow 29,037 104,609Net income -191,834 -40,159Dividend 9,566 13,336Equity attributable to equity holders of the company 498,061 695,253Investments in property, plant and equipment 6,437 7,743Investments in intangible assets 13,135 11,705Stock market value at year-end 481,723 502,855Total number of shares issued at year-end 79,715,875 78,448,505 Average number of employees (FTE) - indirect personnel 6,175 7,003- direct personnel 79,353 87,841 Number of branches 1,137 1,225 RATIOS EXPRESSED AS PERCENTAGES EBITA / revenue 2.3% 1.0%Operating income / revenue -5.7% -0.1%Net income / revenue -6.7% -1.2%Dividend / net income - -Equity / total assets 36.9% 42.0% PER SHARE IN EUROS (based on average number of shares outstanding) Net income -2.42 -0.51Operating cash flow 0.37 1.34Dividend 0.12 0.17Equity* 6.25 8.86Share price at year-end 6.04 6.41Highest share price 8.67 16.27Lowest share price 5.06 4.50

* Based on the number of shares outstanding as at 31 December

KEY FIGURES


USG PEOPLE AT A GLANCE

The Netherlands439

Branches

Belgium200

France158

Germany137

Spain82

Italy73

Austria11

Poland23

Switzerland10

Luxembourg4

GE

NE

RA

L S

TAFF

ING

Sta

rt P

eopl

e

SP

EC

IALI

ST

STA

FFIN

G*

Uni

que

Sec

reta

ry P

lus

Tech

nicu

m

PR

OFE

SS

ION

ALS

Eng

inee

ring

ICT

Lega

l

Fina

nce

HR

Sci

ence

Mar

keti

ng, C

omm

unic

atio

n &

Sal

es

* In addition, there are a number of local brands

019

7,0032011

87,841Indirect

6,1752012

79,353Indirect Direct Direct

AVERAGENUMBER

OF EMPLOYEES


PER DIVISION

1,674

973

229

General Staffing

Specialist Staffing

Professionals

Revenue 2012

Revenue 2012

Revenue 2012

58.2%

33.8%

8.0%

610

487

40

Revenue in %

Revenue in %

Revenue in %

Branches

Branches

Branches

75

33

3Flex workers by month*

Flex workers by month*

Flex workers by month*

* in thousands

021

TIME FOR ACTION!

After spending 2011 giving due consideration to the question of what Social Responsibility means for USG People and how to properly embed it within the organisation, USG People filled in the details and specified its intentions in 2012. The initial steps have been taken towards executing the policy and the ball is rolling now.

WHAT IS SR? STRATEGY AND MISSION

The term Social Responsibility (SR) does not mean the same thing for everyone and every company. For USG People SR has first and foremost to do with the way the company performs its core activities and the responsibility that USG People has for the environment and in a social context. In addition SR relates to the question of how USG People can give back to society. These questions are answered within the context of the shared values at USG People.

SR STRATEGYUSG People aims to lead the way in discovering, deploying and developing talent. USG People is focused on finding innovative ways to create added value for all employees, clients and other stakeholders, while at the same time being mindful of what it can do for and give back to society. The SR strategy is defined in the SR policy and has five spearheads. This strategy is aimed at making USG People profitable in a broad sense, with profitability not only being defined as financial benefit but also as benefits for people and planet.

SR MISSIONUSG People already serves an important purpose in society due to the nature of our services – helping people find a suitable job. Our social responsibility objective is linked to this and is defined as follows: ‘USG People wants to distinguish itself as being the go-to employer for putting the growth and development of all people first.’

In this context USG People takes ‘all people’ to mean not just its own internal and external staff but also those who are, for whatever reason, at a greater or lesser distance from the job market, for example people with a disability or those on long-term benefits. USG People wants to make an extra effort on their behalf to enable them to play a part in society again. ‘All people’ also expresses USG People’s strong commitment to diversity. USG People is non-discriminatory and aims to achieve diversity in the composition of its staff.

OUR SR POLICY IN A NUTSHELL

USG People’s SR policy is based on ISO 26000, the most authoritative international guideline for setting up and implementing an SR policy. The guideline offers internationally agreed definitions, principles and core themes in the field of SR.

USG People has defined five spearheads in its SR policy, each of which is divided into the following sub-items: 1. Being a Good Employera. Training and development b. Health and safety, absenteeism and staff turnover c. New Ways of Working d. Business principles

2. Sound Business Practicea. Integrity and transparencyb. Leadershipc. Sustainable procurement

3. Diversitya. Composition of the company’s own staff b. Combatting discrimination

4. Corporate Citizenshipa. Helping people further removed from the job market b. Social involvement and charity

5. Environmental Impact

Ambitions have been defined for each sub-item. USG People is currently in the process of translating the ambitions into specific KPIs. With these ambitions in mind, actions have been defined in anticipation of the KPIs to further shape the SR policy. The KPIs will enable USG People to properly embed the SR policy within the organisation and to monitor it and make any necessary adjustments. USG People started taking specific actions in 2012 and will continue to do so in 2013. A list of these actions is included in the table on page 24. The spearheads, ambitions and action items included in this overview are discussed in detail in the sustainability report.

THE FIRST MILESTONES

On 10 October 2012 – Sustainability Day – USG People announced that two of its operating companies in the Netherlands – Start People and Unique – became climate neutral companies on 1 September 2012. The CO2 emissions of the internal processes of these two operating companies were identified and audited by an external party which issued a statement to this effect. The CO2 emissions of the two operating companies are minimised with the help of reduction plans that are adjusted on an ongoing

SOCIAL RESPONSIBILITY


basis. The remaining emissions are compensated by USG People. USG People does this by investing in a small-scale wood oven project in Kenya which is accredited by the Gold Standard Foundation.

In addition to the climate neutral company, USG People has also launched a pilot called the green flex worker. It involves Start People and Unique offering Dutch clients the possibility to compensate the CO2 footprint of the flex worker at the client’s workplace. This enables clients to reduce their CO2 footprint, give substance to their own SR policy, and make an often not unsubstantial part of the services they procure more sustainable. USG People intends to introduce the green flex worker at every operating company in the Netherlands in 2013.

A third milestone involves the cooperation in the Netherlands of Start People, Creyf’s, Unique and USG Restart entitled Met Werk (‘At Work’). Met Werk provides a sustainable solution to unemployment in collaboration with Dutch municipalities. Met Werk offers an integral solution for all jobseekers, including people further removed from the job market. Job coaching is used to help this group of people get and keep a job. Tailored job interview training is also offered.

The general idea behind this is that with 20% of the people entitled to benefits at work, the remaining 80% can benefit from the extra efforts. This is made possible by using the unclaimed benefits of the 20% to pay for the reintegration of the other jobseekers. That means that the impact of Met Werk on municipal budgets is neutral, while providing a sustainable solution for people further removed from the job market. At the same time Met Werk can coordinate and give substance to the SROI (Social Return on Investment) requirement for municipalities and their suppliers.

The aforementioned initiatives are three examples of ways that USG People took its first steps towards embedding SR into its day-to-day activities in 2012.

TRANSPARENCY AND STAKEHOLDERS

Two important preconditions for our SR policy are ‘transparency’ and ‘the involvement of stakeholders’.

Involving stakeholders in our SR policy is extremely important to USG People. USG People is eager to stay attuned to what is going on in society. That is why USG People organised a third stakeholder meeting in 2012. The participants included direct and indirect employees, clients, suppliers, unions, knowledge centres, the human rights committee, banks, shareholders, charities, the external auditor, the Executive Board, municipal and federal government representatives and the industry association. We spoke with them about a number of dilemmas we faced in the past year. The stakeholders expressed their appreciation for the visible steps USG People has taken in the past few years with

regard to sustainability. USG People would like to thank all the stakeholders for their input and their valuable contribution.

EMBEDDING A Corporate Director Social Responsibility was appointed at the end of 2010. The corporate director reports directly to the CEO. Embedding this position close to the Executive Board illustrates the strategic importance of this subject and the Executive Board’s commitment to it.

The fact that USG People takes socially responsible business practice seriously is also evident in the SR objectives that have been linked to the level of variable remuneration for the Executive Board since 2012. In 2012 targets were linked to drafting a new training policy, embedding the business principles in the HR cycle and introducing the green flex worker.

AMBASSADORSIn the first quarter of 2012 USG People launched an SR ambassadors network. The network links people who are interested in the subject. These people share their thoughts, identify opportunities and create support for a wide range of sustainability issues within their own organisation or department. After all, SR is closely linked to employees and creating support in every layer of the company is crucial in this respect.

FURTHER INFORMATION? CHECK OUT THE SR REPORTUSG People aims to communicate as clearly and specifically as possible on its SR policy, objectives and results. The publication of this report will coincide with the release of the first sustainability report which will elaborate in more detail on the SR policy, ambitions and specific actions. Therefore please refer to the sustainability report for further information on how USG People shapes its role in society.

023

“TWO IMPORTANT PRECONDITIONS FOR OUR SR POLICY ARE ‘TRANSPARENCY’ AND ‘THE INVOLVEMENT OF STAKEHOLDERS’.”

AMBITION WHAT DO WE STILL WANT TO DO?

1. Being a good employer

To pay above-average attention to training and development for the wide array of positions and needs. USG People is responsible for coaching its employees properly and employees bear responsibility for their own development.

* Drafted a plan of action in order to implement the new training policy in 2013.

* Focus on the sustainable employability of all staff by embedding the new training and development policy in the organisation.

TRAINING AND DEVELOPMENT

WHAT DID WE DO IN 2012?

* Focused extra attention on attrition and preventing accidents.

* Promoted healthy living during Sustainability Day, e.g. by holding a stair-climbing race.

* Continue to roll out a new HR management system, making it possible to deal with absenteeism and attrition more effectively.

HEALTH, SAFETY, ABSENTEEISM AND ATTRITION

USG People wants to ensure that its own employees and flex workers have a safe and healthy working environment, so that they can focus on the task they have been assigned and to minimise attrition due to accidents or poor working conditions.

* Launched various pilot projects aimed at promoting New Ways of Working.

* Compiled a work kit for employees and managers for the application of New Ways of Working.

* Outsourced the IT network in the Netherlands, thus technically supporting New Ways of Working.

* Launched a Great Place to Work study.

* Further implement other, smarter ways of working, also benefitting from previous experience.

* Continue to participate in the Great Place to Work study.

* Evaluate the outcome of the Great Place to Work study and take any necessary follow-up steps.

NEW WAYS OF WORKING

USG People wants to be a progressive and even more attractive employer that encourages its employees – where possible – to adopt a more innovative way of working, and an employer that facilitates the opportunities surrounding New Ways of Working.

2. Sound business practice

USG People expects all its own employees and flexible workers to apply the five business principles in their daily activities. Doing business and communicating in an honest, clear and transparent way will be monitored on an ongoing basis.

* Adapted the CDAS to improve the corporate governance model.

* Started implementing the revised business principles.

* Expanded communication on the SR policy.* Set up SR ambassador’s network. * Organised stakeholder dialogue.

* Publish first sustainability report. * Set SR KPIs. * Continue to engage stakeholders in SR policy.* Continue to explore integrated reporting

opportunities.

INTEGRITY AND TRANSPARENCY

* Started implementing the revised business principles.

* From 2013 employee assessments will be partly based on compliance with the business principles, which have been integrated into the HR cycle.

BUSINESS PRINCIPLES

All employees feel connected to USG People and its operating companies and actively put the business principles into practice.

* Organised leadership training for senior management.

* Implemented leadership competencies in the HR cycle.

* Constantly focus on (personal) leadership and taking full advantage of people’s strengths.

LEADERSHIP

USG People aims to realise a value-driven leadership model based on trust and responsibility with scope for the development of personal leadership skills, while focusing on the important elements of putting the strategy into practice and achieving results.


AMBITION WHAT DO WE STILL WANT TO DO?

2. Sound business practice

USG People aims to increase sustainable procurement.

* Completed assessment of procurement processes.

* Launched Smart Buy project.

* Devise new procurement policy which will embed sustainability in the processes.

SUSTAINABLE PROCUREMENT

WHAT DID WE DO IN 2012?

3. Diversity

USG People aspires to be an inclusive organisation: we want to take full advantage of the various talents and abilities of our employees and be a company in which everyone contributes to operating results – to the best of their ability.

* Initiated USGdiversityatwork.be website. * Increased focus on the internal placement of

people further removed from the job market.

* Create a (partial) diversity scan. * Continue to pay attention to the placement of

people further removed from the job market within our organisation.

COMPOSITION OF THE COMPANY’S OWN STAFF

* Scored 95% on ABU (Dutch Federation of Private Employment Agencies) mystery calls with discriminative requests.

* Drew up anti-discrimination e-learning module. * Developed ‘Everyone equal’ logo.

* Constantly focus on anti-discrimination compliance.

COMBATTING DISCRIMINATION

USG People aims to banish discrimination, wrongdoing and undesired behaviour.

* Cooperated with Dress for Success, Dutch Carreer Cup and Windesheim Flevoland.

* Participated in JINC Flash Internship. * Placed 375 wood-burning stoves for the

Paradigm Project in Kenya.

* Continue to support the Paradigm Project in Kenya. * Further roll out the Vakcollege concept. * Supporting initiatives that make a contribution

to society and the development of fellow human beings.

SOCIAL INVOLVEMENT AND CHARITY

USG People wants to keep encouraging its employees and make it easier for them to volunteer to make a difference in society and help others.

4. Corporate citizenship

We aspire to play a leading role in helping people further removed from the job market find a job.

* Launched Met Werk in the Netherlands. * Defined USG Talents United in Belgium. * Placed 10,000 people further removed from the

Dutch job market via USG Restart.

* Actively help people further removed from the job market rejoin the ‘regular’ workforce, e.g. through Met Werk and USG Restart.

HELPING PEOPLE FURTHER REMOVED FROM THE JOB MARKET

5. Environmental impact

USG People wants to limit the negative impact of its actions on the natural environment as much as possible. In doing so the company aims to reduce its CO2 footprint by 10% in 2015 compared to 2011.

* Defined the CO2 footprint and introduced the climate-neutral company.

* Introduced the green flex worker at Start People and Unique in the Netherlands.

* Purchased green electricity for the head offices in Almere and various branches.

* Launched a pilot project with electric vehicles and installed charging poles in parking garages.

* Draw up the CO2 footprints for all operating companies in the Netherlands so that all Dutch operating companies become climate-neutral.

* Launch the green flex worker concept at all operating companies in the Netherlands.

* Draft a CO2 reduction plan. * Conduct a widespread study into mobility and draw

up a plan of action for a new mobility policy.

025

HR KEY FIGURES

74Corporate

Fte

23%Part-time

77%Corporate

Full-time

36%Part-time

64%Professionals

Full-time

BY DIVISION

RATIO OF FULL-TIME TO PART-TIME STAFF

General Staffing

2,709Fte

Specialist Staffing

2,121Fte

SSC61%Full-time

39%Part-time

Specialist Staffing66%Full-time

34%Part-time

Professionals333Fte

SSC810Fte

38%Part-time

General Staffing62%Full-time

37%USG People63%Full-time Part-time

TOTAL2012

6,047 FTE


32%21-30

0%≤20

AGE COMPOSITION

41%31-40

1%21%41-50 >60

5%51-60

MALE-FEMALE COMPOSITION

20%Female

80%Male

EB

51%Female

49%Male

Middle management

80%Male

20%Female

SB26%Male

74%Female

USG People

31%Female

Senior management69%Male

027

STOCK MARKET LISTING

The ordinary shares of USG People are listed on NYSE Euronext Amsterdam, where options on the shares are also traded. USG People is a component of the Amsterdam Midcap Index (AMX).

SHARE CAPITAL

At the end of 2012 the number of USG People ordinary shares outstanding was 79,715,875. In 2012 the number of shares outstanding rose by 1,267,370 as the result of the distribution of stock dividend. In 2012 no bonds were presented for conversion on the outstanding convertible bond which was repaid in full in cash on 18 October.

In June 2012 USG People founder Alex Mulder increased his interest by 291,592 shares due to the distribution of stock dividend for 2011. As a result the number of shares owned by Alex Mulder rose to 16,055,031 shares, which meant that his stake in USG People rose slightly to 20.1%. 100% of the shares are in free float.

RESULT PER SHARE

The result per share is based on the result before amortisation and impairment of acquisition-related intangible assets and before unrealised value changes to interest rate derivatives. In our opinion this provides an accurate reflection of the operating results and a clear understanding when making comparisons with previous years. In 2012 the result amounted to € 27,784 (2011: -€ 12,627).

The result per share is calculated on the basis of the average number of shares.

The result per share for 2012 was € 0.35.

OUTSTANDING SHARES NUMBER

31 DECEMBER 2011 Ordinary shares 78,448,505Conversion rights attached to bond 6,609,138CHANGES IN 2012 Distribution of stock dividends 1,267,37031 DECEMBER 2012 Ordinary shares 79,715,875Conversion rights attached to bond -

2012 2011

Reported net income -€ 191,834 -€ 40,159Amortisation and impairment ofacquisition-related intangible assets € 230,100 € 36,196Unrealised value adjustments tointerest rate derivatives -€ 6,942 -€ 4,625Income tax expense -€ 3,540 -€ 4,039Net result for calculation of resultper share € 27,784 -€ 12,627

€ 2.122006

Share

€ 0.562005

Share

-€ 0.162011

Share

€ 0.352012

Share

€ 0.492010

Share

€ 1.792008

Share

-€ 0.112009

Share

€ 2.382007

Share

INFORMATION ONTHE SHARE

* Previous years are not adjusted for dilution resulting from the distribution of stock dividends

PREFACE & ORGANISATION 029

% share price

SHARE PRICE AND VOLUME DEVELOPMENT

The first half of 2012 was characterised by high volatility in the capital markets. The shares of staffing companies considerably outperformed the market in the first few months of the year. By mid-March, the share prices of the large staffing companies that operate in Europe (Adecco, Randstad, ManpowerGroup, USG People, Kelly Services) had risen on average 26% since the end of last year, with the average increase at 30% excluding Kelly Services. The share price of USG People rose 35% in the period while the leading AEX index was up 8%. In the period that followed the stock markets were gripped mainly by movements in Spanish bond rates. The indices on European stock markets followed this trend and the ongoing problems with sovereign debt in peripheral European countries resulted in an extremely

tense situation in the markets. This weighed on share prices and the gains achieved early in the year were completely lost. In mid-June the share prices of the aforementioned staffing companies were already lower than at the end of 2011. Early in June the AEX index was also 9% below the closing level of 2011.

In the summer the European Central Bank announced a plan for unlimited purchases of sovereign debt (so-called Outright Monetary Transactions, OMT). This decision significantly averted the extreme risks in the Eurozone and helped the stock markets to recover in the second half of the year. Recovery in the USG People share price was, however, halted by the economic slowdown in the European countries and the associated temporary staffing markets in which USG People operates. The share price dropped 6% in the year as a whole.

Share price development of USG People in 2012 compared to the AEX index and peers

130

110

90

70

USG People Randstad Adecco

AEX IndexKelly ServicesManpowerGroup

Trading volume declined in 2012 compared to 2011 due to the difficult market conditions. The number of shares traded was 11 million lower than the year before. The volume of shares traded was € 0.6 billion in 2012.

INFORMATION PER SHARE BASED ONAVERAGE NUMBER OF SHARES

DISCLOSURE OF MAJOR HOLDINGS

Under the Dutch Act on the Disclosure of Major Holdings in Listed Companies the following interests were declared:

Alex Mulder 20.1%ING Investment Management Luxembourg S.A.,ING Fund Management B.V. and ING Investment Management Belgium N.V./S.A. 8.7%

SHAREHOLDINGS OF EXECUTIVEBOARD MEMBERS

Rob Zandbergen 85,765Leen Geirnaerdt 3,619Eric de Jong 19,417Hubert Vanhoe 3,049Albert Jan Jongsma 16,595

SHAREHOLDINGS OF SUPERVISORYBOARD MEMBERS

Alex Mulder 16,055,031

DIVIDEND POLICY

The objective of the dividend policy is a dividend distribution of approximately one-third of net income before amortisation and impairment of acquisition-related intangible fixed assets, adjusted for tax effects. Also, in determining the dividend it has been decided to adjust the net income for unrealised value adjustments to interest rate derivatives. Each year it is established whether the dividend will be offered either in cash or fully in ordinary shares chargeable to the share premium reserve or to other reserves.

INVESTOR RELATIONS

USG People is committed to being transparent and accessible for both its shareholders and its institutional and retail investors so as to enable investors to make as fair an assumption as possible of the value of the company and the attractiveness of the share.

Our investor relations efforts are aimed at increasing the visibility and active interest in the USG People share for a broad group of investors. We aim to achieve an effective spread of the shares, and to be an attractive partner for both institutional and retail investors.

TRADING VOLUMES 2012 2011 2010 2009 2008 2007 2006 2005

Number of shares in millions 93 104 113 126 178 168 114 54Trading volume in millions of euros 598 1,032 1,447 1,250 2,140 4,410 3,255 695

2012 2011 2010 2009 2008 2007 2006 2005

Operating cash flow € 0.37 € 1.34 € 1.38 € 3.20 € 4.29 € 3.18 € 2.50 € 2.31Net income -€ 2.42 -€ 0.51 € 0.20 -€ 0.44 € 0.24 € 2.21 € 1.76 € 0.33Dividend € 0.12 € 0.17 € 0.16 - € 0.58 € 0.81 € 0.72 € 0.20Dividend / net income (%) - - 80% - 242% 37% 41% 61%

Shares

PREFACE & ORGANISATION 031

Meetings and roadshows are organised to provide clear communication to investors, analysts and the financial media. Every quarter the publication of earnings is accompanied by a conference call or presentation for analysts and the media, and the CEO and CFO take part in conferences and roadshows. These gatherings provide an opportunity to meet investors and are a valuable complement to our communication through the website and other media.

An Analysts’ Day was held at head office in Almere on 28 March 2012 and two analysts’ meetings were held in 2012, one at the presentation of the 2011 annual results and the other at the 2012 half-year results. The first-quarter and third-quarter results were presented and discussed in a conference call. These gatherings were accessible via webcasts from the USG People website. In the interests of direct contact with shareholders and investors, in 2012 roadshows and conferences were organised in the Benelux, the United Kingdom, the United States, France, Germany and Switzerland.

The number of media contacts and analysts covering our company remained about stable in 2012. USG People is currently followed actively by around 15 analysts representing most major brokers and securities houses.

TRUSTEE REPORT3% Subordinated Convertible Bonds 2005 due 2012 with a principle amount of € 115,000,000 of USG People N.V.

In compliance with the provisions of article 33, paragraph 2 of the trust deed executed before Mr. R.J.J. Lijdsman on October 18th, 2005, we report as follows.

During the year no bonds were offered for conversion.

The remaining amount of the loan was redeemed onOctober 18, 2012. 114,999 bonds à € 1,000.- were offered for redemption.

Amsterdam, February 27, 2013

ANT Trust & Corporate Services N.V.H.M. van Dijk

FINANCIALCALENDAR26 APRIL 2013 • Publication of first-quarter 2013 results (before market opens)• Analysts’ conference call on first-quarter results

8 MAY 2013• Annual General Meeting of Shareholders

26 JULY 2013•Publication of second-quarter 2013 results (before market opens)•Analysts’ meeting and press conference on second-quarter

results

25 OCTOBER 2013 •Publication of third-quarter 2013 results (before market opens)•Analysts’ conference call on third-quarter results

28 FEBRUARY 2014 •Publication of fourth-quarter and full-year 2013 results

(before market opens)•Analysts’ meeting and press conference on fourth-quarter

and annual results

“USG PEOPLE IS CURRENTLY FOLLOWED ACTIVELY BY AROUND 15 ANALYSTS REPRESENTING MOST MAJOR BROKERS AND SECURITIES HOUSES”

REPORTS

MESSAGE FROM THE CHAIRMAN

2012 was the year in which USG People’s revised strategy was embedded in the organisation.

The Executive Board reassessed the strategy in October 2011. The strategy is in part focused on giving clear further substance to the business model. The international brands that have been identified are being rolled out in an identical way in the countries in which USG People operates. One of the reasons why this was possible was because the markets in European countries have increasingly matured in recent years and have therefore become more and more similar. An important development in this respect was the further liberalisation of legislation and regulations pertaining to flexible labour and the fact that the percentage of workers with flexible labour contracts in the workforce continues to rise. USG People is able to take even better advantage of developments in society thanks to its increased focus on selected markets with a few strong European brands.

THE SUPERVISORY BOARD

REPORTS

The aforementioned developments see to it that demand for specialist services and the mediation of professionals are playing a bigger and bigger role in the USG People portfolio. USG People’s strategy is in keeping with this and is in part being shaped by the further rollout of the Professionals division in other countries. In 2012 a great deal of effort was made to also continue to implement the strategy in practice and to embed it properly and effectively within the organisation. This involved governance by country being replaced by governance by brand in 2012. This is happening at all three divisions: General Staffing, Specialist Staffing and Professionals. This change process will not be completed overnight. In 2012 the main changes were implemented so that the organisation can continue to concentrate on its commercial strength, despite these difficult times.

As in previous years the Supervisory Board spent a great deal of its time in 2012 monitoring the further implementation of the company’s strategy in general, and on developments in the (flexible) labour market in particular. How will USG People adapt to new developments and realities? Which opportunities, possibilities and adversity will USG People face? How can USG People make the most of opportunities and how can we overcome adversity or turn it into an opportunity? In other words: How does the labour market look today, tomorrow and the day after tomorrow and how will that translate to USG People in the year 2020? All these matters were discussed in detail in the Supervisory Board.

Flexibility is not only the core business of USG People, but also a reality in society in 2012. The revised strategy enables USG People to respond better to the many different changes in today and tomorrow’s world. And what will the day after tomorrow look like? Nobody can say for sure. In the opinion of the Supervisory Board, USG People is doing everything it can to organise the company as flexibly as possible and invest in the development of talent so that it continues to play an important role in the flexible labour market the day after tomorrow.

Cees VeermanChairman of the Supervisory Board

“IN 2012 A GREAT DEAL OF EFFORT WAS MADE TO ALSO CONTINUE TO IMPLEMENT THE STRATEGY IN PRACTICE AND TO EMBED IT PROPERLY AND EFFECTIVELY WITHIN THE ORGANISATION”

033

REPORTS

From left to rightJoost van Heyningen NanningaAlex MulderMarike van Lier LelsRinse de JongCees Veerman

035

ALEX MULDERAlex Mulder (1946) founded Unique Uitzendburo in 1972, which by consequence makes him the founder of USG People N.V., of which he was chairman and CEO up to 2006. At the General Meeting of Shareholders in 2006 Mulder was appointed to the USG People Supervisory Board. Alex Mulder is also managing director of Amerborgh International N.V., a management company whose activities include investing and acquiring stakes in promising (young) companies as well as in art and culture. He is also chairman of Stichting AM Foundation. His term of office ends in 2014. Alex Mulder holds Dutch nationality.

JOOST VAN HEYNINGEN NANNINGAJoost van Heyningen Nanninga (1946) joined the USG People N.V. Supervisory Board in April 2001. He is a senior partner in Egon Zehnder International, giving him broad expertise in the field of personnel and organisation. Joost Van Heyningen Nanninga sits on the supervisory boards of various companies including Z.B.G. Capital B.V. and Breevast B.V. He is also an active member of several foundations and associations, including the United World College Foundation and the Rembrandt Association. His term of office ends in 2013. Joost van Heyningen Nanninga holds Dutch nationality.

RINSE DE JONGRinse de Jong (1948) joined the USG People N.V. Supervisory Board on 20 December 2010. A registered accountant, Rinse de Jong was most recently employed as Chief Financial Officer of Essent, where he was also responsible for risk management and IT. He is a member of the supervisory board and a member of the audit committee of NV Nederlandse Gasunie and sits on the supervisory board and chairs the audit committee of Enexis Holding NV. He is also chairman of the supervisory boards of EAH Holding B.V. and Bakeplus Holding BV. Rinse de Jong is a member of the Board of Supervision of the Guarantee Fund for the Health Care Sector (Waarborgfonds voor de Zorgsector) and an executive committee member of the foundation Stichting Aandelenbeheer BAM Groep and of the Foundation for the holding of priority shares in the public limited liability company Wereldhave. His term of office ends in 2014. Rinse de Jong holds Dutch nationality.

SUPERVISORY BOARD PROFILES

MARIKE VAN LIER LELSMarike van Lier Lels (1959) has been a member of the USG People N.V. Supervisory Board since December 2002. She graduated from Dordrecht technical college in 1983 and from Delft Technical University in 1986. She subsequently held a number of management positions with Royal Nedlloyd, Van Gend & Loos, Deutsche Post Euro Express and Schiphol Group. Marike van Lier Lels is a member of the supervisory boards of various companies including KPN, Reed Elsevier, TKH Group and a member of the executive board of Vereniging Aegon. She also chairs the Board of Supervision of the Netherlands Society for Nature and the Environment, a member of the Council for the Environment and Infrastructure, a member of the Central Planning Committee of the Dutch Central Planning Bureau and until 2012 she was a member of the Dutch Advisory Council for Science and Technology Policy (AWT). Her term of office ends in 2014. Marike van Lier Lels holds Dutch nationality.

1

2

3

4

1

REPORTS

CEES VEERMANCees Veerman (1949) joined the Supervisory Board of USG People N.V. on 1 December 2009 and became chairman on 1 March 2010. From 2002 to 2007 he was the Dutch minister of Agriculture, Nature and Food Quality. Cees Veerman currently holds professorships at the universities of both Tilburg and Wageningen, and is CEO of Bracamonte B.V. In addition, he sits on the supervisory boards of companies including Rabobank Nederland, Barenbrug Holding B.V., Koninklijke Reesink N.V. and Ikazia Ziekenhuis Rotterdam, and is a member of the supervisory committee of research institute Deltares. He is also a member of the executive committee of the Netherlands Organisation for Scientific Research (NWO). His term of office ends in 2016. Cees Veerman holds Dutch nationality.

5

4

32

5

037

REPORT

The Supervisory Board has a different role than the Executive Board. The Supervisory Board is an independent body that monitors the policies pursued by the Executive Board and maintains an overview of the general course of business and the manner in which the company shapes its strategy. The Supervisory Board advises the Executive Board on a wide array of matters.

COMPOSITION

The Supervisory Board consisted of six people until the General Meeting of Shareholders in May 2012: Cees Veerman (chairman), Christian Dumolin, Joost van Heyningen Nanninga, Rinse de Jong, Marike van Lier Lels and Alex Mulder. The term of Christian Dumolin expired in May 2012 and no successor was appointed, so that the Supervisory Board consisted of five people for the rest of the year.

The Supervisory Board has two internal committees: the audit committee and the remuneration and appointments committee. Each committee is subject to its own internal regulations which specify its duties, responsibilities and procedures. These regulations – along with the regulations of the Supervisory Board – can be found on the USG People website.

DIVERSITY OBJECTIVESThe profile of the Supervisory Board is focused on nationality, age, gender, experience, expertise and social diversification.

It is the objective of the Supervisory Board to include at least one member at all times:• whodoesnotholdDutchnationality;• whoisafemale;• whohasexperienceinthepolitical,administrative,socialand ethical or academic sector;• whohasfinancialexpertise;• whopossessesspecificexperiencerelatingtotheoperations of USG People and knowledge about the labour market.

The current structure of the Supervisory meets the aforementioned objectives, with the exception of diversity of nationalities since the departure of Christian Dumolin. Any further appointments will aim as much as possible to achieve a balanced and diverse composition of the Supervisory Board.

RESIGNATION ROTA At the end of 2012 the Supervisory Board consisted of five members appointed according to the following resignation rota:

DUTIES

OVERVIEW AND ADVICEThe duties of the Supervisory Board include monitoring the policies pursued by the Executive Board. More specifically, we advise on strategic matters and corporate objectives, both on request and on our own initiative. We assess the structure and operation of the internal risk management and control systems, the reporting process, and budgeted and actual results. In doing so the emphasis is always on compliance with applicable laws and regulations. In the performance of our supervisory duties we take into account the social responsibility aspects relevant to USG People and relations with shareholders and other stakeholders.

STAKEHOLDERS AND CORPORATE GOVERNANCEIt is also the duty of the Supervisory Board to weigh the interests of the company and all its stakeholders, including shareholders, financiers, society, industry organisations, unions, the world of science, clients, staff and candidates. We aim to achieve the right balance between short-term and long-term interests, between focusing solely on shareholder value and also taking the views of the other stakeholders into consideration. The Supervisory Board attaches a great deal of importance to the fact that the company remains in dialogue with all its various groups of stakeholders: from investors and shareholders to the works council, candidates and clients. By clearly explaining the course which the company has charted and the way it aims to achieve its objective, we create trust in management and therefore also in the company. For more information on the organisation’s corporate governance, please refer to the Corporate Governance section on page 70.

ACTIVITIES

MEETINGS AND TOPICS OF DISCUSSIONIn 2012 the Supervisory Board met five times in person and six times by conference call. One meeting was devoted to the job performance assessment interviews held by the Supervisory Board members with the individual members of the Executive Board. As in previous years, a company visit was also scheduled.

FIRST APPOINTED APPOINTMENT UNITL

Cees Veerman (chairman) 2010 2016Joost van Heyningen Nanninga 2001 2013Rinse de Jong 2010 2014Marike van Lier Lels 2002 2014Alex Mulder 2006 2014

REPORTS

Strategic developments were discussed every quarter. Of the aforementioned meetings, the Supervisory Board held five conference calls to discuss the monthly results and developments.

To prepare for the meetings the chairman of the supervisory board discussed the agenda with the CEO. Recurring agenda items included financial and operational developments, share price movements, budget and forecast matters and the implementation of the strategy. If necessary directors were invited to expand on certain topics.

In December 2012 the Supervisory Board and Executive Board visited the new flagship branch of USG Professionals in Antwerp. During the visit the board members were able to speak with the local management and consultants and there was ample opportunity to pose questions. These visits give the Supervisory Board members the chance to gain an even better understanding of developments in the market and, more specifically, of activities in the workplace.

In September 2012 the Supervisory Board met with each member of the Executive Board individually to discuss the performance of the individual member and the Executive Board as a whole board. The Supervisory Board also assessed its own performance.

TOPICSIn the performance of its monitoring duties the Supervisory Board focused on five main topics: the strategy, the realisation of company objectives, financial and non-financial reporting, risks and the interests of stakeholders. StrategyWith respect to the strategy the main priority in 2012 was to ensure that the revised strategy was properly embedded in the company. A sharper focus on the organisation and the brands was key in this respect. This enhanced focus is also on the rapidly changing trends in the industry and the changing needs of candidates and clients. Labour market and legislative developments were also an area of attention for the Supervisory Board, with innovation and sustainability also being a point of discussion at Supervisory Board meetings. The following topics were discussed more specifically: • theM&Aprocess;• possibleacquisitionsanddivestments;• themanagingofthedivisions;• thefurtherdevelopmentofnewdistributionchannels including social media and the internet in relation to the services provided by USG People.

Realisation of objectivesThe Executive Board has set itself three strategic objectives: expanding the company’s leading positions in selected markets,

strengthening its position in growth markets and focusing on investing in high-yield concepts. Furthermore the Executive Board had set itself two financial targets: achieving an average EBITA margin of 6% throughout the cycle and a leverage ratio of no more than 2. The aforementioned objectives were discussed at all Supervisory Board meetings and are closely monitored. The rollout of USG Legal Professionals in various countries, for example, is a specific result of the realisation of company objectives. This also applies to the acquisitions of Control and Easy Way, both of which were finalised in 2012.

Financial and non-financial reportingThe Supervisory Board monitored the financial reporting process and discussed it with the Executive Board, the auditor, the Corporate Audit & Risk Management department, and also one-on-one with the CFO. The budget, targets and realised results were a recurring item on the agenda. Detailed talks were held with the auditor on subjects including the quality of internal control, the financial statements and the reporting process.

Innovation, Social Responsibility and leadership were the main topics of discussion with regard to the non-financial indicators. The three themes are often linked together, as is the case with the new distribution model. The introduction of Unique’s new flagship branch in Amsterdam is a specific example that makes it clear that working differently means steering and managing differently. At the same time clients and candidates are brought together in a more innovative way and USG People’s CO2 emissions are reduced because consultants are able to work more flexibly and the number of branches is lowered. The Supervisory Board is very much in favour of such an integrated approach. Another example is the introduction of the green flex worker, with Unique and Start People being climate neutral companies since September 2012 and clients having the opportunity to take their responsibility for the environment when taking on a flexible employee. A third example is the ‘Met Werk’ initiative that gives substance to the issue surrounding Social Return on Investment (SROI). These are three good examples of ways to embed innovation, leadership and social aspects into the company’s core business.

The remuneration of the Executive Board is based on both financial and non-financial indicators, demonstrating the Supervisory Board’s focus on both financial and non-financial targets. The Supervisory Board concluded that the financial reporting process is adequate.

039

In addition to the aforementioned, the Supervisory Board held discussions on the following topics: • theactivitiesandreportoftheexternalauditor,alsowith regard to non-auditing activities;• theremunerationpolicy;• thedividendpolicy;• theprogressmadetowardsachievingthetargetsset;• theassessmentoftheexternalauditorandthepolicywith regard to the rota of the auditor;• leadershipwithintheExecutiveBoard;• theSRpolicy.

Risk managementRisk management and control are important topics for USG People and therefore also for the Supervisory Board. Extensive talks were held both in the Supervisory Board as a whole and within the audit committee in particular about financial reporting and control mechanisms, risk management and the findings of the internal and external auditors and compliance with their recommendations. Following up these recommendations was another topic of much discussion, as well as: • areviewofthemainrisks;• theoutcomeofaudits;• measurestakentominimiserisks;• therevisedstrategyandtheimplicationsforriskmanagement;• thegovernancestructure;• theadaptationoftheCorporateDelegationofAuthority Scheme (CDAS);• areviewofthe‘new’riskareassuchasSR,innovationand distribution channels.

StakeholdersIt is the responsibility of the Supervisory Board to weigh the interests of the company with those of all its stakeholders. These include shareholders, candidates, clients, direct and indirect employees, works councils, unions, industry associations, the political arena, financiers and society at large. The Supervisory Board endeavours to achieve the right balance between short, medium and long-term interests while focusing not only on shareholder value but also on stakeholder value. Remaining in dialogue with all the different stakeholders is a very important part of this and sees to it that the company is sensitive to the various ongoing issues in the flexible labour market. The Supervisory Board spoke with the members of the Executive Board on a regular basis about relations with the various stakeholders, more specifically about:• contactbetweentheExecutiveBoardandshareholders;• contactwiththeCentralWorksCouncil;• contactwiththeunions;• contactwithclients.

The Supervisory Board was in contact with the central works council and participated in the external stakeholders’ meeting on SR.

ATTENDANCEThe entire Supervisory Board attended nearly every meeting. In 2012 the attendance rate was 94%. The individual Supervisory Board members prepared thoroughly for the meetings and made an active contribution to meetings. This illustrates the serious way in which this body performed its supervisory duties. The members of the Executive Board attended nearly every meeting. They were of course not present when the Supervisory Board met to discuss the performance of the Executive Board. The chairman of the Supervisory Board discussed the performance of the Executive Board and its individual members in a separate meeting with the chairman of the Executive Board.

At the request of the Supervisory Board the external auditor from PricewaterhouseCoopers Accountants N.V. also attended the Supervisory Board meeting held on 1 March 2012. The annual report and annual accounts were approved during this meeting.

PERFORMANCE

PERFORMANCE AND ASSESSMENTIn the year under review the Supervisory Board discussed and assessed its own performance and that of its individual members and the internal committees. The members of the Executive Board were not present at that time. 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.

The topics discussed included the presence, contributions and involvement of the members of the Supervisory Board. One of the conclusions drawn from the assessments was that the members, both individually and together, are sufficiently critical of themselves and each other. In addition the individual members complement each other, ensuring that everything can be discussed at well-balanced meetings. The chairman of the Supervisory Board spoke with each of the individual members of the Supervisory Board about their performance and concluded that they performed adequately, both individually and as an entity.

Ample knowledge of the temporary staffing market is represented in the Supervisory Board, which also includes financial specialists. This ensures that the board maintains sufficient knowledge and expertise to adequately perform its supervisory duties.

INDEPENDENCE AND CONFLICTS OF INTERESTBest practice provisions III.2.1. and III.6.1. up to and including III.6.4. of the Dutch Corporate Governance Code were complied with. Alex Mulder operated as CEO of USG People until 9 May 2006. He currently has a shareholding of more than 10% in the company and is therefore non-independent in the context of best practice provision III.2.1.

REPORTS

In 2012 no transactions transpired involving a conflict of interest on the part of any member of the Supervisory Board, nor were there any transactions between USG People and any private individual or legal entity with a shareholding of at least 10% in the company.

REPORT OF THE AUDIT COMMITTEE

The tasks of the audit committee include advising the Supervisory Board with respect to the operation of the internal risk management and control systems. This means compliance with the relevant laws and regulations and monitoring the functioning of codes of conduct. The committee’s tasks also include fiscal planning policy and execution, financing, the control and assessment of the financial and non-financial reporting process and the application of information and communication technology. The chairman of the committee reports the main findings to the Supervisory Board. The minutes of the committee meetings are shared with every member of the Supervisory Board.

Until May 2012 the audit committee consisted of Rinse de Jong (chairman), Christian Dumolin and Marike van Lier Lels. After the General Meeting of Shareholders the committee consisted of two members due to Christian Dumolin’s departure from the Supervisory Board. The audit committee met five times in person in the year under review and once by conference call. At the request of the Supervisory Board all members of the audit committee attended the meetings, along with the CEO, CFO and the Corporate Director of Corporate Audit & Risk Management (CARM). PricewaterhouseCoopers Accountants N.V. also attended the meetings at the request of the Supervisory Board. Hubert Vanhoe (COO), Francis Coppé (CD Treasury) and René Bos (VP ITS & CIO) also attended one of the meetings at the Supervisory Board’s request to expand on certain developments in the division, credit management and the ICT playing field.

Subjects discussed by the audit committee in 2012 include:• the2011financialstatements;• theauditor’sreportforthe2011financialyear;• the2011risksection;• thefinancialorganisationalstructure;• theimpairmentmodel;• developmentssurroundingintegratedreporting;• theICTorganisation;• thepolicywithregardtomarginsandmarginauthorisations;• USGPeople’sriskmanagement;• thecorporategovernancemodelandtheexamplethatthe Executive Board sets;• thedebtposition;• creditmanagement;• theresultsandquarterlyearningsreleases;• USGPeople’sfiscalposition;• theassessmentoftheexternalauditorandlegislativechanges to the auditor’s position;• theCorporateAudit&RiskManagementannualinternalauditplan; • thefindingsofCorporateAudit&RiskManagement;• theback-officeprocesses;• legislativeamendmentsandcontrolmeasures;• thefront-officeorganisation;• theperformanceoftheauditcommittee;• theinterimreportsoftheexternalauditor.

The audit committee made an important contribution to the risk section in this annual report. For a description of the main risks, please refer to that section on page 66.

At one of the meetings the committee assessed its own performance and that of the individual members of the audit committee, and concluded that it had performed its assigned duties in a useful and positive manner. In the opinion of the committee, its contacts with the Corporate Audit & Risk Management department, the external auditor and the Executive Board have been professional and constructive. The committee held an extensive meeting with the Executive Board about the example it sets and how this can be conveyed even better. The Supervisory Board is very pleased about the manner in which this has been tackled and will be shaped further in 2013. On various occasions the committee also reflected on developments with regard to independence, assessment and rota of the external auditor. In view of recent developments on the subject, in 2013 the committee will assess the implications this has for USG People and adjust its internal regulations accordingly.

041

REPORT OF THE REMUNERATION AND APPOINTMENTS COMMITTEE

The scope of the remuneration and appointments committee’s duties includes the remuneration structure, the remuneration packages of the individual members of the Executive Board, the performance of the individual members of the Supervisory Board and the Executive Board, and the monitoring of the size and composition of the Supervisory Board. The committee is also responsible for drawing up profiles for the members of the Supervisory Board and nominating members for the Executive Board. The chairman of the committee reports the main findings to the Supervisory Board.

In 2012 the remuneration and appointments committee consisted of Joost van Heyningen Nanninga (chairman), Alex Mulder and Cees Veerman. The remuneration and appointments committee met twice in person in 2012. The CEO attended the meetings at the request of the Supervisory Board. Please refer to the Remuneration report on our corporate website to view the report of the remuneration and appointments committee.

PRINCIPAL FEATURES OF THE 2011 – 2014 REMUNERATION POLICY

The remuneration policy that applies to the USG People Executive Board is set by the General Meeting of Shareholders for a period of several years. The shareholders approved the remuneration policy for the period from 2011 to 2014 during the General Meeting of Shareholders on 26 May 2011.The Supervisory Board determines the remuneration of the individual members of the Executive Board based on the policy set by the General Meeting of Shareholders. The remuneration policy for the period from 2011 to 2014 is aimed at attracting and retaining qualified directors for the Executive Board who have the drive and sustained commitment to add value to USG People.

MARKET-COMPATIBLE POLICYThe policy is aimed at being as much as possible in line with market-compatible practice, taking into account the remuneration practice within the performance peer group. This group consists of USG People’s direct competitors. Another reference point is a labour market reference group consisting of a balanced selection of shares listed on the Amsterdam Midkap Index (AMX) and the Amsterdam Exchange Index (AEX). This labour market reference group provides a framework for determining the amount, structure and composition of the remuneration of the members of the Executive Board.

STRUCTURE OF THE EXECUTIVE BOARD REMUNERATIONThe remuneration of the Executive Board consists of five components: a fixed annual gross salary, a variable short-term

cash remuneration, a variable long-term share remuneration, a pension contribution and a car and other emoluments.

1) Fixed annual gross salaryThe Supervisory Board applies a market compatible remuneration level within the median and third quartile range – based on the aforementioned labour market reference group – for the fixed annual gross salary for the members of the Executive Board.

The fixed annual gross salaries for the period from 2011 to 2014 were, in principle, set as follows:

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

2) Variable short-term cash remunerationWith effect from 2012 the Supervisory Board has elected to measure the strategic growth of USG People using two financial performance indicators, namely Earnings Before Interest, Tax and Amortisation (EBITA) as a percentage of revenue and EBITA as a percentage of the gross margin. The short-term variable cash remuneration is also linked to the third financial indicator: Days Sales Outstanding (average DSO). Part of the short-term variable remuneration now depends on the results of qualitative objectives.

These qualitative objectives relate to Leadership, Social Responsibility and Innovation. In light of the strategic development of USG People the results targeted within these areas are set annually.

3) Variable long-term share remuneration The Supervisory Board outlined a share plan for the period from 2011 to 2014 – the Unique Share Plan – that was approved by the General Meeting of Shareholders on 26 May 2011.

The policy for the variable long-term share remuneration is defined as follows:• The variable long-term share remuneration is conditionally granted each year based on the results of pre-set financial parameters. With effect from 2012 these are EBITA as a percentage of revenue and EBITA as a percentage of the gross margin. Furthermore part of the variable long-term share remuneration is conditionally granted each year based on qualitative targets;

POSITION FIXED GROSS ANNUAL SALARY

CEO € 625,000CFO € 400,000COO* € 400,000CCO € 325,000

* Two COO’s are seated in the Executive Board.

REPORTS

• Thefinancialperformancetargetsfortheyearinquestionare set by the Supervisory Board prior to the start of the year. After the close of the year in question it is determined to what extent the applicable financial performance targets and qualitative targets have been met; • The variable long-term share remuneration target is 70% linked to the financial performance targets. The remaining 30% is linked to qualitative targets;• Iftheresultsmeetthedefinedthresholdtargets(bothfinancial and qualitative targets), the number of shares unconditionally allocated is 140% (for achieving the financial targets, 2x 70%) + 30% (for achieving the qualitative targets) = 170% of the target number of shares; • Thegrossvalueofthenumberofsharesconditionallygranted for each individual performance year will never exceed one year’s fixed annual gross salary excluding pension contribution; • TheperformanceperiodoftheUniqueSharePlan2011-2014

is four years. After this four-year period the total of all shares conditionally granted each year will be granted unconditionally. Shares are only allocated unconditionally if the director is still employed by the company at the time the shares are formally unconditionally allocated. A holding period of one year, during which time the shares may not be transferred, applies after the shares are unconditionally granted. The Supervisory Board is authorised to reclaim the variable remuneration allocated to a member of the Executive Board on the basis of inaccurate (financial) information (clawback). The Supervisory Board is authorised to adjust the value of a remuneration component granted conditionally in a previous year upward or downward if, in its opinion, the remuneration would lead to unjust results due to exceptional circumstances during the period in which the pre-set performance criteria were or should have been achieved.

1) The target and maximum number of shares for the CFO for the entire performance period equals 57,500 and 98,000, respectively, with effect from 01.01.2012. The target and maximum

number of shares of the CFO was 12,500 and 21,250 per year, respectively, up to and including 31.12.2011.

2) The target and maximum number of shares for the COO Professionals & Specialist Staffing for the entire performance period equals 40,833 and 69,416, respectively, with effect from

01.01.2013. The target and maximum number of shares of the COO Professionals & Specialist Staffing was 10,000 and 17,000 per year, respectively, up to and including 31.12.2012.

The Supervisory Board retains the right to deviate from the aforementioned target number of shares per year in certain cases.

CEO 0 90,000 153,000CFO1) 0 60,000 102,000COO2) 0 60,000 102,000CCO 0 40,000 68,000

MAXIMUM (170%) NUMBER OF SHARES IN THE

PERFORMANCE PERIOD(TOTAL OF 4 YEARS)

MINIMUM (IF THE MINIMUM PERFORMANCE

IS NOT ACHIEVED)

TARGET (100%) NUMBER OF SHARES IN THE

PERFORMANCE PERIOD(TOTAL OF 4 YEARS)

Under the Unique Share Plan the number of shares to be allocated conditionally in the four-year performance period is as follows:

043

CEO Rob Zandbergen3) See note 31 December 2014CFO Leen Geirnaerdt 20 December 2010 19 December 2014COO Eric de Jong 20 December 2010 19 December 2014COO Hubert Vanhoe 10 May 2012 9 May 2016CCO Albert Jan Jongsma 20 December 2010 19 December 2014

APPOINTED UNTILDATE OF APPOINTMENT

3) Rob Zandbergen was a director of Solvus NV from 01.03.2003 and subsequently a member of the Executive Board of USG People. In connection with the alignment of the terms of employment

of all members of the Executive Board, his appointment for an indefinite period of time was changed into an appointment for a period of four years from 01.01.2011.

NOTICE AND DISMISSAL POLICYA notice period of three months has been agreed with the members of the Executive Board for the members of the Executive Board and six months for the company. The payment upon termination of the contract of employment for reasons not attributable to the person will not exceed the amount of one year’s fixed gross annual salary (subject to the agreed term of notice), calculated over the fixed gross annual remuneration including pension contribution. If the maximum of one year’s fixed gross annual salary for a member of the Executive Board dismissed during the first term of their employment is manifestly unreasonable, the person becomes eligible for a termination payment of not more than twice their fixed gross annual salary,

including pension contribution. If the company terminates the contract of employment for reasons attributable to the person, the company will not be obliged to make any payment whatsoever.

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

4) Pension contributionThe members of the Executive Board receive a gross pension contribution of 23% of their fixed gross annual salary.

5) Car and other emolumentsThe members of the Executive Board have a lease car at their disposal suitable to their position. The members of the Executive Board do not receive a fixed allowance for representation

expenses. Any business-related representation expenses are claimed and reimbursed. APPOINTMENT POLICYThe members of the Executive Board are appointed by the Supervisory Board. All members of the Executive Board are appointed for a period of four years from the moment of their appointment:

REPORTS

The following tables provide a detailed account of the number of shares conditionally allocated to members of the Executive Board in 2012:

REMUNERATION OF THE EXECUTIVE BOARD IN 2012In 2012 the remuneration of the individual members of the Executive Board was as follows:

7) Shares conditionally granted are recognised in the remuneration report after the end of each financial year. Shares are only allocated unconditionally if the member of the Executive Board is

still employed by the company at the moment that the shares are granted unconditionally.

8) Number of shares granted if the minimum performance is not achieved.

Number of shares (minimum)8) 0 0 0 0 0 Number of shares (target) 22,500 15,000 15,000 10,000 10,000 Number of shares (maximum) 38,250 25,500 25,500 17,000 17,000 Number granted (result) 12,488 8,415 8,295 5,530 5,650 Granted on 08.05.2013 08.05.2013 08.05.2013 08.05.2013 08.05.2013 Average closing price performance year € 6.22 € 6.22 € 6.22 € 6.22 € 6.22 Number granted (previous performance years) 6,750 3,750 4,500 250 3,000 Unconditionally granted on AGM 2015 AGM 2015 AGM 2015 AGM 2015 AGM 2015 Restricted until AGM 2016 AGM 2016 AGM 2016 AGM 2016 AGM 2016

ROBZANDBERGEN

CEO

SHARE PLAN 2011-2014

PERFORMANCE YEAR 2012

LEEN GEIRNAERDT

CFO

ERIC DE JONG

COO

HUBERT VANHOE

CCO

ALBERT JAN JONGSMA

COO

SHA

RES

CO

ND

ITIO

NA

LLY

GR

AN

TED

7)

4) Variable short-term cash remuneration for the financial year.

5) Includes the allocation of shares under the Unique Share Plan 2008-2010 and the Unique Share Plan 2011-2014, in accordance with IFRS 2.

6) Pertains to period from 01.12.2011 to 31.12.2011.

Rob Zandbergen 2011 € 625,000 € 187,500 € 210,000 € 143,750 € 1,166,250 € 20,1002012 € 625,000 € 135,206 € 189,000 € 143,750 € 1,092,956 € 22,100Leen Geirnaerdt 2011 € 350,000 € 105,000 € 132,000 € 80,500 € 667,500 € 9,8502012 € 400,000 € 87,492 € 130,000 € 92,000 € 709,492 € 12,050Eric de Jong 2011 € 400,000 € 120,000 € 136,000 € 92,000 € 748,000 € 20,1002012 € 400,000 € 86,212 € 121,000 € 92,000 € 699,212 € 20,900Hubert Vanhoe 20116) € 29,167 € 8,750 € 70,000 € 6,708 € 114,625 € 1,1002012 € 350,000 € 75,435 € 45,000 € 80,500 € 550,935 € 17,800Albert Jan Jongsma 2011 € 325,000 € 97,500 € 96,000 € 74,750 € 593,250 € 16,3002012 € 325,000 € 71,607 € 86,000 € 74,750 € 557,357 € 16,800

FIXED ANNUAL GROSS SALARY

VARIABLE SHORT-TERM CASH

REMUNERATION4)

VARIABLE LONG-TERM SHARE

REMUNERATION5)PENSION

CONTRIBUTION TOTAL

CAR AND OTHER

EMOLU-MENTS

The members of the Executive Board have decided in consultation with the Supervisory Board to forego part of the variable cash remuneration to which they are entitled for the 2012 performance period. Both the Supervisory Board and Executive

Board believe that the decision to lower the variable cash remuneration to 40% of the achieved variable cash remuneration sends a good and appropriate signal to all internal and external USG People stakeholders in these difficult economic times.

045

Summary and recognition of the methods used to determine whether the performance criteria for the variable short-term and long-term remuneration are met:• the followingperformancecriteriaapplied in2012:EBITAas a percentage of revenue, EBITA as a percentage of the gross margin and DSO (Days Sales Outstanding). These criteria also stipulate minimum results which if not met mean that no variable (short-term and long-term) remuneration is granted. A maximum remuneration is also set with regard to the results; • in linewith the terms theSupervisoryBoarddecidedduring the 2012 performance year to adjust the financial performance criteria for the variable short-term and long-term remuneration. The budget was set in the expectation that the economy and markets would pick up in the course of the year. This did not happen, however. If necessary the Executive Board will therefore adjust the performance assessment for the variable short-term and long-term remuneration for senior management.

Option rightsNot taking into account the existing share plan, no option rights are held by members of the Executive Board.

LoansNo loans or guarantees have been granted to members of the Executive Board.

REMUNERATION OF THE SUPERVISORY BOARD The fixed remuneration of the chairman and members of the Supervisory Board is set at € 57,500 and € 42,500 per year, respectively. All members of the internal committees receive € 7,500 per year for their involvement in these committees. All members of the Supervisory Board also receive an annual expense allowance of € 2,000.

In 2012 the individual remuneration of the members of the Supervisory Board was as follows:

No share options are hold by members of the Supervisory Board.

No loans, advances or related guarantees have been granted to the members of the Supervisory Board.

APPROVAL OF THE FINANCIAL STATEMENTS, DIVIDEND PROPOSAL AND DISCHARGE

As stipulated in the Articles of Association, the Supervisory Board submits the financial statements as drawn up by the Executive Board to the General Meeting of Shareholders for adoption. The financial statements have been audited and received an unqualified auditor’s report. To read the report from PricewaterhouseCoopers Accountants N.V. please refer to page 148.

In accordance with the long-term dividend policy of USG People, the Executive Board proposes to distribute a dividend of € 0.12 per share, either in cash or in shares, for the 2012 financial year.

USG People aims to achieve continuity in the distribution of dividend in keeping with the cash-generating capacity and distribution possibility by means of a dividend. The long-term dividend policy is based on a distribution of one-third of net income before amortisation and impairment of acquisition-related intangible fixed assets and adjusted for the effects of unrealised value adjustments to interest rate derivatives.

This proposal is expanded on in more detail on page 147. We, the Supervisory Board, support this proposal.

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

Cees Veerman € 67,000 € 67,000Christian Dumolin9) € 26,800 € 52,000 Joost van Heyningen Nanninga € 52,000 € 52,000Rinse de Jong € 52,000 € 52,000Marike van Lier Lels € 52,000 € 52,000Alex Mulder € 52,000 € 52,000

20112012PERIODICAL REMUNERATION (INCLUDING EXPENSE ALLOWANCE)

9) The term of Mr. Dumolin expired on 10.05.2012. Mr. Dumolin is not available for reappointment.

REPORTS

IN CONCLUSION

These are turbulent times: for the global economy, for the euro, for the flexible staffing industry and also for USG People. Nevertheless USG People took vigorous steps in 2012 to implement the revised strategy which ensured that the company has sufficient clout and a clear focus on the future. Furthermore, USG People has shown – particularly in these difficult times – that it is adjusting to the new reality. For some business models this means that the company is reinventing itself in certain areas, focusing on important themes like sustainability, innovation and leadership. Despite the many uncertainties the Supervisory Board is facing the future with confidence.

The Supervisory Board would like to take the opportunity to thank all USG People employees and management for their exceptional contribution in yet another turbulent year. They were once again confronted with restructurings and increased pressure to boost our commercial strength. The measures were understandable but certainly not easy to take, not for the Supervisory Board and the Executive Board, and not for our employees. Even more so as we were forced to say goodbye to valued colleagues. The Supervisory Board would like to thank all employees for their exceptional contribution this year.

The Supervisory Board wishes all our employees and of course the Executive Board the wisdom, pleasure and good fortune to make 2013 a successful year. USG People will continue to move forward and strengthen its position with passion, a focus on results, mutual commitment and a wealth of expertise.

Almere, 27 February 2013

Supervisory Board

Cees Veerman, ChairmanJoost van Heyningen NanningaRinse de JongMarike van Lier LelsAlex Mulder

047

From left to rightEric de JongLeen GeirnaerdtRob Zandbergen Hubert VanhoeAlbert Jan Jongsma

From left to right

REPORTSREPORTS 049

1

LEEN GEIRNAERDT, CFOLeen Geirnaerdt (1974) studied Applied Economics with an Accountancy option at the University of Antwerp. After graduating with Great Distinction, she started her career at PricewaterhouseCoopers. Having progressed from auditor to manager over a period of six years, she then moved to Solvus Resource Group and the position of Corporate Controller. Since the acquisition of Solvus N.V. by USG People, Leen Geirnaerdt has held various senior management positions, including that of General Manager of USG People Belgium’s Shared Service Center Transactions & Support from 2008. Leen Geirnaerdt joined the Executive Board of USG People N.V. as Chief Financial Officer on 1 November 2010. Leen Geirnaerdt holds Belgian nationality.

ERIC DE JONG, COO GENERAL & SPECIALIST STAFFINGEric de Jong (1963) studied International Business Economics at the Professional Agricultural University and obtained his MBA in the UK. In 1986 he started his career as an intermediary with Start Uitzendbureau B.V. After holding various management and executive positions, he was appointed general manager in 2002. As Executive Vice President Eric de Jong was a member of the Board of Management of USG People N.V. from 1 October 2007. Following a change in the senior management structure in mid-2010 he became a member of the Executive Board where, as Chief Operational Officer, he held responsibility for all activities in Belgium, France, Italy, Luxembourg, Austria, Poland, Spain and Switzerland until the end of 2011. Following the strategic restructuring announced on 28 October 2011, Eric de Jong has been responsible for General Staffing as well as the international brands Unique and Secretary Plus since 1 December 2011. Eric de Jong holds Dutch nationality.

EXECUTIVE BOARD PROFILES

1

2

ROB ZANDBERGEN, CEORob Zandbergen (1958) has been active in the temporary employment sector since early 2003. He has been CEO of USG People N.V. since 1 July 2010. He started off as Chief Financial Officer of Solvus N.V., the publicly listed company acquired by USG People N.V. in 2005. Following the takeover he was appointed CFO of USG People. In addition to his work at USG People, Rob Zandbergen sits on various executive and supervisory boards. He is a member of the supervisory board of the Dutch Flower Group and chairman of the supervisory board of SNT. From 2005 to end-2011, he served on the board of StiPP, the Dutch pension fund for the staffing sector. Rob Zandbergen graduated from the Royal Netherlands Military Academy in Breda, where he specialised in administration and economics, after which he studied business economics at the University of Amsterdam. Before joining the board of Solvus in 2003 he held various national and international executive positions at publicly listed companies. Rob Zandbergen holds Dutch nationality.

3

HUBERT VANHOE, COO PROFESSIONALS & SPECIALIST STAFFINGHubert Vanhoe (1963) has worked for USG People N.V. since 2005. After studying Communication Science at the University of Brussels he went on to obtain an MBA from the Open University Business School. During his career Hubert Vanhoe held various commercial management positions with companies including DHL and Manpower before moving to the role of Managing Director of Office Depot and Staples (formerly Corporate Express). In 2005 he made the switch to Start People in Belgium as General Manager and was appointed Vice President of USG People in Belgium just over two years later. On 1 December 2011 Hubert Vanhoe joined the Executive Board as Chief Operational Officer, a position in which he is responsible for all the activities of Professionals, Technicum and a number of specialist local labels. Hubert Vanhoe holds Belgian nationality.

4

4

5

REPORTS

ALBERT JAN JONGSMA, CCOAlbert Jan Jongsma (1968) joined USG People N.V. in 1995. After obtaining a degree in Law, he took various courses including an MBA. Following a career ranging from corporate lawyer to Corporate Director for Legal & Acquisitions at USG People N.V., in September 2006 he was appointed Corporate Vice President for Legal and M&A and became a member of the Executive Committee. Following a change in the senior management structure in mid-2010 he became a member of the Executive Board where, as Chief Corporate Officer, he is responsible for Legal, M&A, Corporate Governance, Compliance and HRM. Albert Jan Jongsma holds Dutch nationality.

5

051

2

3

15%

10%

5%

0%

-5%

-10%

-15%

FINANCIAL DEVELOPMENTS

In 2012 European markets slowed down due to a drop in economic growth, which led to shrinking demand in the labour markets in the countries in which USG People operates. Even in these currently challenging times USG People is electing to maintain the standout quality of its service which has enabled it to build a sustainable relationship with its clients over the years. USG People aims to be a stable and reliable partner for its clients and candidates with a clear and consistent direction, both in good times and in lesser times.

In 2012 revenue dropped compared to the year before mainly as a result of the macro-economic downturn but also due to the consistent application of USG People’s selective client focus. The execution of the strategic plans for operational excellence and cost flexibility made the USG People organisation more effective in 2012 and significantly lowered the cost level.

Consolidated results

REVENUEUSG People revenue declined by 10.8% to € 2,876.2 million in 2012 (2011: € 3,224.9 million). Acquisitions had a slight impact of 0.4%. Throughout the year revenue hovered relatively stably at around 10% under the level achieved last year. The economic slowdown in our markets meant that demand was mainly lower in the industrial segment and in associated sectors such as the transport sector. These sectors usually respond strongly to changes in economic growth, due in part to supply effects. Furthermore, demand was low in the SME segment, while the drop in revenue was less substantial in the administrative sector.

Annual revenue trend in percentage

REPORT OF THEEXECUTIVE BOARD

(in millions of euros) Reported Non-recurring Underlying 2012 2011 2012 2011 2012 2011 12/11 Revenue* 2,876.2 3,224.9 - - 2,876.2 3,224.9 -10.8%Gross profit 596.6 680.2 3.8 2.6 600.4 682.8 -12.1%Operating expenses 507.5 616.8 -9.9 -56.9 497.6 559.9 -11.1%Depreciation 23.5 31.6 -2.9 -4.7 20.6 26.9 -23.4%EBITA 65.6 31.8 16.6 64.2 82.2 96.0 -14.4% Amortisation** 230.1 36.2 -212.4 -16.9 17.7 19.3 -8.3%EBIT (operating result) -164.5 -4.4 229.0 81.1 64.5 76.7 -15.9%Financial results -12.0 -18.9 -8.4 -5.9 -20.4 -24.8 -17.7%Income tax expense -20.9 -16.8 1.7 -9.5 -19.2 -26.3 -27.0%Divestment of activities 5.6 - -5.6 - - - -Minority interests -0.1 -0.1 - - -0.1 -0.1 -

NET INCOME -191.8 -40.2 216.7 65.7 24.9 25.5 -2.4% Gross margin 20.7% 21.1% 20.9% 21.2% EBITA margin 2.3% 1.0% 2.9% 3.0%

Q1 Q2 Q3 Q42012

Q1 Q2 Q3 Q42010

Q1 Q2 Q3 Q42011

* In 2012 the recognition of revenue changed with regard to the placement of self-employed people with no staff (brokerage). This revenue is now recognised on a net basis in accordance with IAS 18. The change relates solely to revenue. For the sake of comparison the revenue figure for 2011 has been restated. The effect on 2011 revenue is a negative € 19.9 million compared to previously reported revenue.

** Amortisation concerns the depreciation of acquisition-related intangible assets, including goodwill

REPORTS

Revenue dropped in the staffing divisions, General Staffing and Specialist Staffing. The Professionals division, on the other hand, reported a rise in revenue. Revenue at General Staffing amounted to € 1,674.4 million in 2012, a drop of 11.0% compared to € 1,880.9 million in 2011. Signs of improvement were visible in Spain and Poland at the end of the year, whereas the other countries showed no signs of a tangible recovery. Within the division growth was achieved in 2012 in in-house services and payrolling services, two of the strategic growth concepts that provide added value to both the clients and USG People. The concepts provide attractive growth potential that can be utilised from within the existing network.

Revenue at Specialist Staffing equalled € 972.9 million in 2012, down 13.6% from € 1,126.3 million in 2011. Revenue in this segment was sharply influenced by a downturn in Germany and Italy. In the first half of the year revenue at Specialist Staffing in Germany decreased due to company-specific developments which temporarily drew attention away from the organisation’s commercial focus. In the second half of the year the focus was once again on commercial excellence and the revenue trend was once again in line with the market trend which, however, worsened. In 2012 the Italian market was confronted with a sharp economic downturn that was more pronounced than that of countries in the north of Europe due to problems with sovereign debt. The situation eased after announcements of reforms by the Italian government along with available support measures announced by the ECB. However, this did not translate into visible recovery in 2012 yet. Revenue in the Benelux dropped by 10.4%. This decline was somewhat larger than the decline in the general temporary staffing market due in part to the fact

that in the uncertain market situation companies tended to opt for price above quality services such as the services offered by brands like Unique and Secretary Plus.

Revenue at Professionals increased by 5.1% to € 228.9 million in 2012 from € 217.7 million in 2011. Revenue in the Netherlands rose by 9.3%, boosted by the acquisition of Control. In Belgium growth turned into contraction in the course of the year due to a reduction in demand for engineers and ICT staff. Finance, on the other hand, achieved strong growth in Belgium. Revenue in the other countries was lower as a result of a drop in revenue in finance in France.

On a country level, revenue declined across the board. In the Netherlands revenue was 8.4% lower than in 2011 and the drop in Belgium was 9.2%. The decline was mainly visible in the industrial segment and associated sectors where demand fell in 2012. In France, where the temporary staffing market is largely driven by the industrial sector, revenue was down 13.3%. Germany and Italy posted the sharpest decline, at 20.9% and 15.9%, respectively. Germany, which had long been viewed as an exception in Europe that appeared immune to the economic downturn in the rest of the world in 2012, also saw revenue slow and Italy wrestled with reforms as a result of its level of government debt. USG People preformed relatively well in Spain with a more modest 2.3% drop in revenue. The decline remained limited due to a combination of operational and commercial excellence under persistently difficult market circumstances in the country. Revenue in the other countries was down a combined 15.8%.

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General Staffing Specialist Staffing ProfessionalsYear-on-year revenue trends by quarter

053

GROSS PROFITIn 2012 underlying gross profit decreased to € 600.4 million from € 682.8 million in 2011. As a percentage of revenue the gross margin was 20.9% in 2012, a drop of 0.3% compared to 2011. The drop was mainly due to mix effects and pricing effects. There was a shift towards large clients, and services that are provided at a lower margin put in a disproportionally strong performance. Another effect was wage increases in Germany that could not be completely passed on to clients.

Across the board the share of revenue of large clients rose in 2012, which had a negative impact on the group margin. At the same time concepts such as in-house services and payrolling grew. These services are offered at lower gross margins and offer attractive profitability due to the low level of operating expenses. The aforementioned shifts in the mix resulted in a lower gross margin for the group.

Revenue from recruitment and selection fell by 16.1% in 2012. This revenue accounted for 1.0% of group revenue, compared to 1.1% in 2011. This had a negative effect on the gross margin of 0.1%. Revenue from recruitment and selection tends to account for 1.0% to 2.0% of total group revenue throughout the cycle. As this revenue has no direct cost price, it has a disproportionately high impact on the gross margin of the group.

The gross margin declined due to wage increases that could not fully be passed on to clients, in addition to the mix effects, and there was a general increase in margin pressures, particularly in the second half of the year.

In 2012 a one-off amount of € 3.8 million was recognised in the cost price relating to possible pension obligations for seconded flex workers. In 2011 the cost price also included costs from

previous years. These amounted to € 2.6 million. Reported gross profit equalled € 596.6 million in 2012 compared to € 680.2 million in 2011.

OPERATING COSTSUnderlying operating costs including depreciation amounted to € 518.2 million in 2012 (2011: € 586.8 million). This equates to a drop of € 68.6 million or 11.7% in 2012. Improvements in the organisation and the sharing of best practices as a result of international brand governance have led to a substantially lower level of costs and the ability to adapt more effectively. Underlying costs declined even more than revenue in 2012 (-10.8%), which meant there was no negative leverage in profitability. Costs as a percentage of revenue improved to 18.0% from 18.2% in 2011, despite lower revenue.

Both in 2012 and in 2011 the underlying costs were complemented by one-off costs for restructurings, while in 2011 a € 21.2 million provision was taken for possible liabilities arising from the AMP CLAs that had been declared invalid. In both years an amount of depreciation was recognised as a result of an impairment of assets. This amounted to € 2.6 million in 2012 and € 2.1 million in 2011.

Reported operating expenses including the one-off costs mentioned above fell by 18.1% to € 531.0 million (2011: € 648.4 million).

In 2012 the total number of employees at USG People declined by 645 to 6,047 FTEs at the end of the year (end 2011: 6,692 FTEs).

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Revenue in millions of euros

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 The Netherlands Belgium France Germany Spain Italy Other countries

REPORTS

EBITAUnderlying EBITA amounted to € 82.2 million in 2012 (2011: € 96.0 million). The reason for the drop compared with 2011 was the decline in revenue and the gross margin. The reduction in underlying costs exceeded the drop in revenue, meaning that the EBITA margin dropped only slightly to 2.9% of revenue from 3.0% in 2011.

Reported EBITA doubled, mainly as a result of lower non-underlying costs. Including these costs EBITA equalled € 65.6 million compared to € 31.8 million last year.

IMPAIRMENT OF INTANGIBLE ASSETSIn 2012 an impairment was taken on the value of the assets of General Staffing and Specialist Staffing. The valuation determined at the impairment test in accordance with IFRS is based on the current outlook with regard to the future results of combined business units (discounting projected future cash flows). Projected results are determined based on assumptions for the future. As a result of the current economic situation in Europe these assumptions for the coming years have been adjusted downward, resulting in a value which is lower than the carrying value of the assets on the balance sheet.

The total impairment on the value of the assets was € 215.0 million (2011: € 19.0 million) of which € 210.9 million was taken as a goodwill write-off, € 1.5 million as amortisation of acquisition-related intangible assets, € 1.6 million as amortisation of intangible assets and € 1.0 million as depreciation of property, plant and equipment.

AMORTISATION OF ACQUISITION-RELATEDINTANGIBLE ASSETSThe amortisation of acquisition-related intangible assets dropped to € 17.7 million in 2012 (2011: € 20.6 million). 2012 included the accelerated depreciation of € 0.7 million for recognised brand rights in connection with the brand name change in Professionals. 2011 included a € 1.3 million impairment in Spain. Amortisation excluding the above figures was € 17.0 million in 2012 and € 19.3 million in 2011.

RECAP OF OPERATING EXPENSES 2012 2011 12/11

Underlying costs Operating expenses 497.6 559.9 -11.1%Depreciation 20.6 26.9 -23.4%Underlying costs including depreciation 518.2 586.8 -11.7%One-off costs Operating expenses 9.9 56.9 Depreciation 2.9 4.7 One-off costs including depreciation 12.8 61.6 Reported operating expenses 531.0 648.4 -18.1%

(in millions of euros)

EBITA 2012 2011

Underlying EBITA 82.2 96.0Non-underlying costs of gross profit -3.8 -2.6Non-underlying costs -12.8 -61.6

Reported EBITA 65.6 31.8


055

IMPAIRMENT 2012 2011

Property, plant and equipment 1.0 1.0Software 1.6 1.1Depreciation 2.6 2.1Goodwill 210.9 15.7Customer relationships 1.5 0.2Candidate databases - 1.1Amortisation 212.4 16.9

Impairment 215.0 19.0


FINANCIAL RESULTThe financial result amounted to -€ 12.0 million in 2012 (2011: -€ 18.9 million). The costs were reduced due to a positive contribution from an unrealised value adjustment to interest rate derivatives of € 6.9 million (2011: € 4.6 million) and a revaluation of recognised earn-outs. In 2011 the financial result was favourably impacted by a revaluation of the subsidiary Vakcollege, the value of which was increased by € 1.3 million. Financing expenses excluding the aforementioned value adjustments fell from € 24.8 million in 2011 to € 20.4 million in 2012.

INCOME TAX EXPENSEIncome tax expense was € 20.9 million in 2012 (2011: € 16.8 million). The tax included a € 4.4 million charge for adjustments with respect to previous years and changes to unrecognised losses. The tax also includes an amount of € 7.4 million of tax on added value (mainly in France). Tax as a percentage of income before profit is therefore distorted and the picture is also distorted due to the aforementioned impairment that is not tax-deductible. If calculated based on underlying tax as a percentage of underlying income, both excluding tax on added value, the tax burden is 32.2% (2011: 42.1%).

DIVESTMENTS OF ACTIVITIESIn December 2012 USG People sold its subsidiary Inter Re. The result of this disposal was € 5.6 million.

NET INCOME In 2012 the net income amounted to -€ 191.8 million (2011: -€ 40.2 million). The reported result was impacted by non-underlying gains and losses and by unrealised value adjustments to interest rate derivatives and fixed assets. Underlying net income declined € 0.6 million in 2012 to € 24.9 million (2011: € 25.5 million).

CASH FLOWThe operating cash flow amounted to € 57.6 million and was lower than last year due in part to a higher income tax payment. In Belgium in 2012 income tax expense was paid for two financial years. The payment in 2012 was € 14.8 million higher due to the fact that the payment term for the previous assessment expired in December. In addition the cash flow from ongoing results was lower, due in part to usage from provisions which were higher in 2012. The operating cash flow from was € 100.8 million in 2011.

The amount of trade receivables sold fell by € 28.6 million compared to the end of 2011. At the end of 2012 € 99.8 million of outstanding trade receivables were sold (2011: € 128.4 million). The amount of investment was virtually unchanged from last year and equalled € 20.4 million (2011: € 19.8 million). The amount of investment in 2012 was in line with underlying depreciation. In addition to replacement investments a few acquisitions and a divestment took place in 2012, totalling € 18.5 million. The amount of interest paid dropped mainly as a result of lower interest expenses on loans due in part to the repayment of subordinated loans. In accordance with its long-term dividend policy, USG People distributed a dividend either in cash or in ordinary shares in 2012, resulting in a cash dividend payment of € 6.4 million.

RECAP OF FINANCIAL RESULT 2012 2011

Underlying financing result -20.4 -24.8Unrealised value adjustments to derivatives 6.9 4.6Revaluation of earn-outs 1.4 -Revaluation Vakcollege - 1.3

Financial result in income statement -12.0 -18.9


RECONCILIATION OF INCOME TAX EXPENSE 2012 2011 Underlying tax -19.2 -26.3Tax on non-underlying results 4.5 20.1Tax on value adjustments to derivatives -1.7 -1.2Tax adjustments for previous years -1.4 -2.1Valuation of unrecognised losses -3.0 -7.4

Income tax in the income statement -20.9 -16.8 Underlying income before tax 44.1 51.9Tax on added value -7.4 -7.7Tax on underlying income excluding tax on added value -11.8 -18.6Tax burden -32.2% -42.1%


RECAP OF NET INCOME 2012 2011

Underlying net income 24.9 25.5Non-underlying income -14.0 -62.1Impairment of assets -215.0 -19.0Unrealised value adjustment to derivatives 6.9 4.6Divestment of subsidiaries 5.6 -Revaluation of earn-outs 1.4 1.3One-off tax effects -1.7 9.5

Reported net income -191.8 -40.2Result per share -€ 2.42 -€ 0.51


REPORTS

CONDENSED CASH FLOW STATEMENT 2012 2011 DIFFERENCE

Operating cash flow 57.6 100.8 -43.2Investments -20.4 -19.8 -0.6Acquisitions and divestments -18.5 -8.6 -9.9Interest expenses paid -17.1 -18.0 0.9Dividend paid -6.4 -5.6 -0.8Change in trade receivables paid -28.6 3.8 -32.4Change in loans 15.3 -28.1 43.4

Change in cash and cash equivalents -18.1 24.5 -42.6

CONDENSED BALANCE SHEET 2012 2011 DIFFERENCE

Fixed assets 836.7 1,053.5 -216.8Income tax assets and liabilities 48.4 21.6 26.8Working capital -82.6 -90.8 8.2Shareholders’ equity 498.6 695.8 -197.2Subordinated borrowings 18.2 141.5 -123.3Net debt to financial institutions 223.6 62.3 161.3Other financial debt 2.1 2.6 -0.5Derivative financial instruments 6.2 13.2 -7,0Provisions 53.7 69.0 -15.3Balance sheet total 1,348.4 1,654.9 -306.5

BALANCE SHEETIn 2012 the balance sheet total fell € 306.5 million to € 1,348.4 million (2011: € 1,654.9 million). The main changes on the asset side concerned fixed assets. Recognised goodwill dropped due to an impairment of € 210.9 million arising from impairment testing. Furthermore trade and other receivables were € 67.0 million or 14.4% lower than last year.

There were also several material changes to shareholders’ equity and liabilities. Equity dropped largely to reported net income, which was negative as a result of the aforementioned

impairment. Subordinated borrowings fell due to the repayment of the convertible bond of € 115.0 million, of which the term expired in October, and a repayment of € 12.5 million on the Stichting Start subordinated loan.

Trade and other payables fell by € 75.3 million (13.5%) and tax liabilities decreased by € 28.9 million due to the aforementioned higher tax payment in Belgium and the sale of Inter Re, a subsidiary with a € 9.1 million deferred tax liability. In addition, the provisions were € 15.3 million lower due to the execution of restructurings.



057

FINANCINGIn 2012 total capital invested dropped due to the goodwill impairment in 2012. On balance the decline was € 159.2 million. Net debt rose by € 38.0 million due in part to a reduction in the amount of trade receivables sold, which fell by € 28.6 million in 2012, and as a result of a previously made tax payment of € 14.8 million.

In October 2012 USG People repaid its € 115.0 million outstanding subordinated convertible bond in cash. The € 700 million financing facility that was concluded with a syndicate of banks in 2011 took into account a cash repayment, thus eliminating the need to refinance in 2012. Due to the repayment the number of outstanding shares was not expanded and financing with the bank facility also leads to substantially lower interest expenses at the low current interest rate.

The drop in shareholders’ equity resulted in a rise in net debt as a percentage of capital invested to 33% (2011: 23%).

Net debt was well within the permissible limits set by the banking covenants. The senior leverage ratio (net debt / underlying EBITDA) was 2.3 at the end of 2012 (maximum limit: 3.0) and the interest coverage ratio (underlying EBITDA / interest expenses) was 6.5 (minimum requirement: 3.5).

DIVIDENDUSG People aims to achieve continuity in the distribution of dividend. The long-term dividend policy is based on a dividend distribution of one-third of net income before amortisation and impairment of acquisition-related intangible assets and adjusted for the effects of unrealised adjustments to interest rate derivatives.

In 2012 net income before amortisation and adjusted for the effects of unrealised value adjustments to interest rate derivatives was € 27.8 million. One-third of this is available for dividend. Divided by 79.7 million shares this equates to a dividend distribution of € 0.12 per share.

At the General Meeting of Shareholders on 8 May 2013 the Executive Board will propose a dividend of € 0.12 per ordinary share, payable either in cash or in shares.

CAPITAL STRUCTURE 2012 2011 DIFFERENCE

Shareholders’ equity 498.6 695.8 -197.2Subordinated convertible bond - 111.6 -111.6Other subordinated borrowings 18.2 29.9 -11.7Net debt to financial institutions 223.6 62.3 161.3Total net debt 241.8 203.8 38.0

Total capital invested 740.4 899.6 -159.2Net debt as a percentage of total capital invested 33% 23%


REPORTS 059

DEVELOPMENT IN THE DIVISIONS

GENERAL STAFFING

OrganisationThe General Staffing division offers its services under the brand name Start People. At the end of 2012 the General Staffing network consisted of 2,709 FTEs and 610 branches. General Staffing operates in eight European countries. The physical branches in this division are located in selected regions where the focus is on achieving a dominant position. General Staffing also uses in-house concepts with HR teams situated at the clients’ facilities.

ServicesGeneral Staffing provides companies with flexible capacity by placing temporary workers and offering outsourcing and payrolling services. The business model of Start People sets itself apart through the effective and quality placement of large numbers of temporary employees with large companies and its strong positioning in a wide array of sectors.

Start People is a top 2 player in the Netherlands and Belgium with its extensive nationwide network. In the countries outside of the Benelux Start People is positioned in a select number of regions with a high degree of economic activity.

StrategyStart People is focused on operational excellence and strives to achieve organic growth from its existing branch network and the constant optimisation of efficiency and productivity. General Staffing aims to realise stable profitability and cash generation. The objective for an average EBITA margin of 5.0% throughout the cycle. This is achieved by providing services of standout quality and by offering value-added services, on the one hand, with an efficient organisation and flexible costs structure, on the other.

1,674General Staffing

Revenue 2012

1,881 -11%Revenue 2011

534The Netherlands

Revenue 2012

599 -11%Revenue 2011

361Belgium & Luxembourg

Revenue 2012

405 -11%Revenue 2011

473France

Revenue 2012

545 -13%Revenue 2011


REPORTS

2012 operating resultsIn 2012 revenue at General Staffing fell by 11% due to lower market demand as a result of the decline in economic growth in Europe. In most countries 2012 was characterised by economic slowdown. In the Netherlands, Belgium and Spain the economy even contracted compared to last year and France showed virtually no growth. The temporary staffing markets, which are strongly linked to the economic cycle, were in decline in most countries in which our General Staffing division is active.

In the three largest countries (the Netherlands, Belgium and France) Start People reported a drop in revenue that was somewhat more pronounced than the market in 2012. This was mainly due to the selective client focus at Start People whereby the quality of services and returns for both the client and USG People take precedence over volume. This focus – an example of the application of best practices across country borders – ensuing from our revised strategy in 2011, strengthens our ability to stand out and our positioning which we will benefit from in the long term.

In Spain revenue was 2% lower than in the previous year due to persistently difficult market circumstances in the country. In the final months of the year the decline in revenue turned into a rise. In the final quarter revenue rose by 6% compared to 2011. Exceptionally strong focus and commercial drive resulted in a string of new clients and a return to growth in the final months of the year despite extremely difficult market conditions.

200Spain

Revenue 2012

204 -2%Revenue 2011

106Austria, Switzerland and Poland

Revenue 2012

128 -17%Revenue 2011

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061

On balance the gross margin at General Staffing was virtually the same as the year before. Positive and negative effects balanced each other out. A relatively sharp drop in revenue from recruitment and selection had a negative mix effect on the gross margin, as did the growth of in-house services with their relatively low gross margins. On the other hand the selective client policy provided a positive counterbalance, ensuring on balance that the margin remained on par for the year as a whole. However, in the second half of the year there was increasing pressure on margins due to the further deterioration of markets.

EBITA dropped to € 43.7 million from € 49.7 million in 2011 due to the decline in revenue. EBITA as a percentage of revenue remained unchanged at 2.6%. Managing operating expenses effectively ensured that they declined in line with revenue, keeping the profit margin stable.

SPECIALIST STAFFING

OrganisationThe Specialist Staffing division provides services under three international brand names: Unique, Secretary Plus and Technicum. This division also includes four local brands in the Netherlands (ASA, Call-IT, Creyf’s and Vakcollege) due to their specific services and spread of activities in the Netherlands. At the end of 2012 the Specialist Staffing division consisted of a network of 2,121 FTEs and 487 branches. The working area of Specialist Staffing has been expanded in recent years and now comprises eight European countries with extensive physical branch networks in the Netherlands, Belgium, Germany and Italy. Outside of these four countries Secretary Plus has now been rolled out in France, Spain, Austria and Switzerland, where it is located in the big cities.

ServicesThe services provided by the Specialist Staffing division stand out in the special attention that is paid to the coaching of candidates and development of their skills. Unique is focused on providing flexible capacity to its clients, mainly in the office segment. Unique also sets itself apart in the personal relationships it maintains with its local clients which allows it to understand the needs of its clients like no other and provide the most suitable candidates. Technicum is specialised in providing technical staff in the construction and engineering sectors and is strongly positioned in the Netherlands and Germany. Secretary Plus is an intermediary in the wide field of management support. The brand has a top position in the Netherlands, Belgium and Germany and is specialised in the mediation, coaching and development of all support professionals in various specialist areas. Secretary Plus is also located in large cities outside of these countries.

StrategySpecialist Staffing is fully focused on specific market segments. The objective is to achieve growth through expansion and the rollout of tried and tested core specialties. The priority for investment is the expansion of distinguishing concepts by strengthening the existing positioning and yield both geographically and service-wise. The Specialist Staffing division has an EBITA margin target of 7.5% throughout the cycle based on the high degree of specialisation and standout quality of its services in specialist areas. In addition, a more flexible cost structure contributes to a more stable result.

973Specialist Staffing

Revenue 2012

1,126 -14%Revenue 2011

397The Netherlands

Revenue 2012

446 -11%Revenue 2011


REPORTS

2012 operating results In 2012 revenue at Specialist Staffing fell by 14% compared to the year before. The largest decline took place in Germany and Italy. In Germany a combination of factors meant that the revenue trend at USG People differed from the general market trend. For example there was a shortage of workers which resulted in higher wages (cost price) which the clients of our operating companies in Germany were not keen on having passed on to them. USG People had recently already passed on extra cost price increases to its clients with regard to the application of another CLA after the AMP CLAs were declared invalid. These multiple price rises in such a short period of time with the confidence of German businesses in the economy also starting to wane in 2012 had an adverse effect on revenue. At the same time, companies offered our temporary workers a permanent contract in the run-up to the introduction of equal pay for flexible workers, which came into effect on 1 November 2012. The number of workers on file dropped as a result, even more so in view of the aforementioned shortage of technical candidates. In addition a few of the former Technicum owners started a new business and convinced Technicum clients and candidates to switch to their company. This resulted in a drop in revenue and necessitated more internal focus and meant that the commercial performance was not optimal. In the course of the year all these developments that were typical of 2012 were addressed and, as

part of the revised strategy and new governance model, plans of action came into effect which ensured that the revenue trend was more in line with the market in the second half of the year. The economic slowdown throughout the year also resulted in increased contraction in the Germany market, however, as was the case in most European countries.

Within the geography of Specialist Staffing the market slowdown was the most pronounced in Italy, which was confronted with sharp economic contraction in 2012. The sectors in which USG People is positioned (such as the industrial and agricultural sectors) were hit hard by the economic slowdown, resulting in a 16% drop in revenue.

In the Benelux revenue at Specialist Staffing was down 10% compared to last year. Business uncertainty as a result of the economic situation in Europe generally led to a prudent policy when it comes to hiring employees and a tendency to favour price over quality. This was particularly notable at the large operating companies such as Unique and Creyf’s, which stand out in the quality of the services they provide to the SME segment, which remained cautious. Technicum in the Netherlands was an exception in this respect with revenue growth of 10%. In its 2012 market monitor the Dutch Federation of Private Employment Agencies (ABU) reported a 3% drop for technical profiles.

115Italy

Revenue 2012

137 -16%Revenue 2011

14Other

Revenue 2012

14 0%Revenue 2011


Revenue 2012

228 -9%Revenue 2011

239Germany

Revenue 2012

301 -21%Revenue 2011

063

The gross margin at Specialist Staffing fell slightly compared to last year as a result of a lower gross margin in Belgium and Germany. The drop in the gross margin in Germany was due to a higher share in revenue from large clients and growth in revenue from in-house services. The low cost level of the in-house concept means that services can be offered at lower gross margins, resulting in a negative mix effect on the gross margin. Furthermore the aforementioned wage increases could not be fully passed on to clients, leading to a drop in the gross margin. The decline in the gross margin in Belgium was mainly due to mix effects. Lower revenue from recruitment and selection and a shift to large clients had a negative effect on the gross margin.

EBITA declined from € 52.5 million in 2011 to € 39.1 million in 2012, mainly as a result of the drop in revenue. The costs were substantially lower due to the more effective flexibility of the cost structure and the cost-saving measures taken. The EBITA margin was 4.0% against 4.6% last year. The drop in revenue and gross margin in Germany had the largest impact on the EBITA margin, while there was also a negative effect from higher costs for the rollout of Secretary Plus in the various countries. The underlying EBITA margin in the Benelux and Italy remained virtually the same as last year.

PROFESSIONALS

OrganisationThe Professionals activities are a part of the overriding USG Professionals brand in which all the professional activities of USG People are united. This makes it possible to position the brands as one in the market with strong coherence, while maintaining the distinct image, recognisability and character of the different expertises. The unified brand has more substance and a more widespread position and profile towards clients while the specific look and feel of the individual brands makes it more attractive for professionals.

At the end of 2012 the Professionals division comprised a network of 333 FTEs and 40 branches. Professionals is active in six European countries. The brand is most strongly positioned in the Netherlands and Belgium. There was expansion in various countries in 2012, with Germany and Switzerland being added to the Professionals area of operation.

ServicesThe Professionals division provides high-quality HR solutions by linking the aspirations of highly-educated professionals with the challenges posed by clients in seven distinct areas of expertise: Engineering | ICT | Legal | Finance | HR | Science | Marketing, Communication & Sales.The division caters to the careers of professionals by helping them develop their talents and continue to grow. By placing the right expertise in the right place at the right time in the right way it enables organisations to reach their goals and be more versatile, resilient and competitive. In doing so Professionals gives both professionals and clients the opportunity to raise the bar and achieve their ambitions quicker.

StrategyUSG Professionals’ services are focused on providing HR solutions in select areas of expertise with highly-educated professionals. The division aims to further develop and grow into a leading position in the European market. This growth will be achieved by rolling out core activities and through acquisitions. Investments in high-yield growth sectors and promising regions are the focus for both organic growth and rollouts and for acquisitions. The target for profitability is an average EBITA margin of 10% of revenue from 2014. This target is achieved by providing services with high added value to our clients and candidates with an efficiently managed organisation.

229Professionals

Revenue 2012

218 5%Revenue 2011

163The Netherlands

Revenue 2012

150 9%Revenue 2011


2012 operating resultsRevenue at Professionals rose by 5% in 2012 compared to the previous year. This increase was achieved through revenue growth in the Netherlands that was aided by the acquisition of Control. Acquired in April, Control meets temporary staffing demands for financial professionals in the Netherlands. Excluding the acquisition the division grew 1% and the activities were up 3% in the Netherlands. A mixed picture can be seen in the different countries as well as in the various areas of expertise. Finance grew considerably (117%) compared to last year (organic growth: 35%). Organic growth was strong in Belgium, while financial professionals were added to the portfolio in the Netherlands due to the aforementioned acquisition. Revenue in finance in France fell as a result of a downturn in demand in the market. Engineering (around one-third of total Professionals revenue)

achieved a 3% rise in revenue and grew in both the Netherlands and Belgium. Growth was also reported in legal and energy, while ICT and marketing, communication & sales saw revenue fall below the level reported in 2011.

The gross margin was somewhat lower than last year due to an increase in the number of large contracts and a lower capacity utilisation rate in areas of expertise where demand fell. A negative mix effect also resulted in a drop in revenue from recruitment and selection.

EBITA rose to € 20.0 million from € 19.5 million in 2011. The decline in the gross margin was offset by an effective alignment of the cost level which meant that EBITA as a percentage of revenue remained virtually the same as last year at 8.7%.


Revenue 2012

60 -1%Revenue 2011

6Germany, France and Switzerland

Revenue 2012

8 -26%Revenue 2011

“REVENUE AT PROFESSIONALS ROSE BY5% IN 2012 COMPARED TO THE PREVIOUS

YEAR. THIS INCREASE WAS ACHIEVEDTHROUGH REVENUE GROWTH IN THE NETHERLANDS THAT WAS AIDED BY

THE ACQUISITION OF CONTROL. ”

REPORTS 065

RISK SECTION

GENERAL PRINCIPLES UNDERLYING OUR RISK MANAGEMENTRisk management is an integral part of our day-to-day business operations. Good risk management and building on opportunities are essential for realising our (strategic) objectives. It is our policy to safeguard the continuity of our business operations while maintaining a healthy balance between our risk appetite and returns. Risk appetite is defined as the total impact of the risks which USG People is prepared to accept as we aim to achieve our (strategic) objectives. USG People has structured its risk management around the strategic, operational, financial and compliance themes. We aim to grow our Specialist Staffing and Professionals brands internationally to strengthen our position in markets that offer attractive growth prospects for high-yield activities. The strategic risk appetite has been adjusted for this purpose. The risk acceptance for operational risks is limited. With respect to financial risks we pursue a stable financial policy with minimum, manageable risks. And a zero tolerance policy is applied when it comes to compliance with legislation and regulations.

FURTHER PROFESSIONALISATION OF RISK MANAGEMENT MODEL IN 2012 In 2012 our strategic reassessment took shape. This reassessment led to adjustments in the risk management model, as described below.

Regular risk sessions are held in our operations and by the people responsible for the brands to identify the main risks. Measures are taken or adjusted if necessary. Corporate Risk Management reports on the status of the risks and measures that have been

identified on a quarterly basis. The identified risks are then reported to the Executive Board. The Executive Board holds a risk management session annually and organises an update session six months later. In addition to the risks and measures reported from within the organisation, the Executive Board is also provided with information for its risk analysis by senior management. The outcome of the session held by the Executive Board results in a determination of the main risks for USG People. Plans of action are drafted for these risks, taking into account risk-mitigating measures that have already been taken. This process helps USG People to keep its risks within the acceptance parameters and to safeguard the implementation of risk-mitigating measures. The main risks are discussed with the Supervisory Board on a regular basis.

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

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

Governance frameworkIt goes without saying that the framework for USG People is defined by external legislation and regulations. USG People operates in various European countries, relying on the services of local specialists to closely monitor legislation and regulations and to respond to changes in a timely manner. The change

CONTROL BY EXECUTIVE BOARD AND OTHER MANAGEMENT LEVELS

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

business principles andcodes of conduct formulating strategy planning & control cycles

corporate policyand regulations

tactical andoperational planning risk management

legislationand regulations

governance framework

operational realisation

realisation of objective

operational controlmeasures

steering mechanisms

REPORTS

in equal pay legislation in Germany is an example of this. We also apply internal guidelines such as a code of conduct, business principles, whistleblower policy, anti-fraud policy and the corporate authorisation matrix. Together these guidelines form the control framework within which USG People aims to achieve its objectives. The framework was once again brought to the attention of all our employees in 2012. The authorisation and procurement system was adapted following the strategic reassessment and we regularly draw attention to the importance of compliance with our guidelines.

Objectives and realising themThe objectives and strategy are the starting point for our tactical and operational planning and the activities through which we seek to achieve our objectives. The reassessed strategy was further translated on a tactical and operational level in 2012. Generalist Staffing, Specialist Staffing and Professionals are increasingly positioning themselves as desired and this will become even more visible in the year to come.

Steering mechanismsSteering mechanisms are needed to achieve the objectives within the governance framework. These include the financial and operational planning 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 of valuation and determination of results. All parties involved work closely together to improve the planning and control cycles. Reports are immediately modified if management information needs change to ensure effective governance. Another example is IT management which safeguards the integrity and continuity of our information, for instance by using back-up and recovery systems, security systems and network and application redundancy. IT is also used to automate control measures in our processes.

Governance by the Executive Board and managementThe Executive Board is responsible for the proper functioning of the risk management and control model, as described above. This responsibility is partly delegated to line managers and staff managers in the organisation.

Supervision and monitoringThe risk management and control system is supervised by the Supervisory Board. The Executive Board reports to and is accountable to the Supervisory Board with respect to the design and operation of the risk management and control systems. The Supervisory Board receives information from the internal and external audit function at regular meetings of the Audit Committee. Audits are conducted 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 and

internal audit identify possible areas for improvement in our risk management and control systems, which are subsequently implemented and reassessed. This regular assessment process allows USG People to continue to control the risks in a constantly changing environment.

MAIN RISKS FOR USG PEOPLEThe main risks relating to our objectives and strategy have been identified. They have been stated along with the associated control measures. The risks and measures must be taken into account when assessing other (forward-looking) information in this annual report.

Strategic risks Revenue growth and margins continue to lag due to limited economic growth / the economic crisisChallenging economic market conditions continued to persist in 2012, resulting in a drop in revenue and the margin. Optimisation of the services portfolio with value-added services and further diversification of revenue and the client portfolio are being employed to limit this risk. This is supported by measures to cope with pressure on margins by increasing productivity. Examples are the integration of client processes and streamlining back-office processes. Furthermore, the cost structure continued to be optimised and costs continued to be made more flexible in 2012.

Economic dependence on EuropeOur geographic spread gives us fewer opportunities to avert the risks of challenging economic market conditions in Europe. An added risk is the decline in economic activity in Europe, due in part to demographic developments and the ageing population. Within Europe we are particularly dependent on the general staffing commodity market. Plans and actions related to the current strategy take this risk into consideration. Every type of investment or divestment and/or takeover will be weighed bearing this in mind. In 2012 we continued to roll out the successful formulas and best practices in the countries to generate revenue and EBITA.

Unsuccessful execution of the focused expansion strategy due to insufficient available liquidityOur expansion strategy takes into account growth by means of organic growth and acquisitions. These acquisitions depend on available liquidity. Management is therefore constantly alert to identify potential takeover candidates, with the Treasury department monitoring group liquidity requirements.

Internal risks as a result of the implementation of the new strategyStrategic adjustments bring various internal risks relating to (1) the change in internal governance processes, (2) changes in communication structures, or (3) the change in responsibilities and powers of employees. If these areas are managed insufficiently, there is a risk that the strategic objectives are

067

not met. A plan of action has been devised to mitigate such internal risks. Most parts of this plan of action have already been implemented; others are or have yet to be. This plan of action is directly managed by the Executive Board.

Not adjusting the distribution model to online developments in a timely mannerBranches play a prominent role in our current business model. We are witnessing a shift towards online activities. The associated risk is that we do not adjust our business model in a timely manner which would mean we would lose our link with candidates and clients. In addition, an expensive distribution model would remain that could not be used efficiently. The effectiveness and validity of our business models is monitored regularly. In 2012 a number of pilots involving the new distribution model were rolled out. If necessary we will adjust the existing business models accordingly. It is currently expected that the number of physical branches will be reduced in the years to come.

Rebranding can lead to a loss of brand valueUSG People intends to rebrand a number of brands in its portfolio. This could lead to change in the way that clients value our brands. USG People safeguards its brand value by implementing a corporate brand strategy, employing Brand Managers and brand books that define the DNA of the brand in a broad sense. The introduction of new brand names involves publicity campaigns aimed at promoting brand awareness and brand value.

Operational risksDependency on strategic partnersDependency on outsourcing partners becomes more risky in the event of increasing insolvency risks or a sudden termination of activities due to deteriorating economic circumstances. Companies are getting into financial difficulty due to continuing economic pressure. Choosing new outsourcing partners as well as intensively monitoring the financial health of new and existing partners plays a large role when it comes to safeguarding the continuity of USG People and its services. We also draw up backup plans as soon as there is any indication of trouble at an outsourcing partner.

Not taking full advantage of innovation opportunitiesUSG People is an organisation where there is room for innovative ideas with respect to our services, processes and structures. A lack of focus can mean that good innovative ideas never see the light of day. The Executive Board along with a team of specialists actively manage the project agenda and set priorities so that the right projects receive the focus and attention they deserve.

Disruptions or lower performance in the business as a result of failing IT infrastructure and/or IT systemsIT system failure or a lower performance of these systems can disrupt our (primary) processes considerably. USG People uses

reputable outsourcing partners for its IT to control this risk. The service and supplier management of the outsourced service was further improved in 2012 compared to previous years. USG People has tried and tested backup and recovery procedures in place for the IT services it manages itself, as well as mirrored IT systems at different locations.

Large diversity of IT systemsThe large diversity of IT systems means there is a danger of uncontrollability and the absence of a platform for further (international) integration. The project launched in 2011 aimed at integrating various front-office systems is on schedule and the unified front-office system will be ready for the first operating companies in 2013. Furthermore, the corporate IT policy is seeing to a further reduction in the diversity of IT systems.

Shortage of staffDifficulty attracting and retaining the temporary staff that is in demand is a risk in times of economic recovery. Staffing shortages may also occur as a result of insufficient ability to find, develop and retain high-calibre own staff. Through our marketing activities and by further increasing our name recognition and image, international career opportunities and programmes for personal development we are able to find staff and retain them. We optimised our online activities in 2012 and will continue to do so to reduce this risk. Two examples of measures are the creation of our own social media platforms and award-winning job vacancy websites like the Unique site.

Financial risksInsufficient liquidity Access to cash and cash equivalents and credit facilities is very important to safeguard the continuity of USG People. Our Treasury department monitors the group’s liquidity requirement based on budgets, forecasts and strategic plans. Treasury also monitors the terms of the syndicated loan and other borrowings, as well as efforts to reduce the debt position (deleveraging). USG People conducts internal stress tests on a regular basis in view of the persistent economic downturn and taking into account the impact on the covenants agreed with the banks.

Goodwill impairment Depending on market circumstances it may be necessary to write off goodwill, which has a negative impact on both earnings and equity. USG People monitors the profitability and added value of its activities so that any goodwill impairment is identified in a timely manner in accordance with IFRS rules. USG People analyses and assesses the goodwill recognised on an ongoing basis.

Changes to the creditworthiness and liquidity of debtorsThroughout the cycle the creditworthiness of clients fluctuates. This can lead to costs as a result of debts that cannot be recovered.

REPORTS

USG People has implemented credit management systems, including with regard to the authorisation of credit agreements with clients as well as insuring debtor risks externally. Our credit management specialists monitor the quality of debts and the changes to the creditworthiness on a regular basis. Important aspects of outstanding trade receivables are discussed during monthly credit meetings.

Greater demand on working capitalAn increased financing requirement can result from an increase in the total debtor amount in the working capital as a result of increased economic activity (in the event of economic recovery) or late payments by clients (in the event of economic slowdown). The presence of local credit management procedures based on the corporate credit management policy mitigates this risk. Tightened in 2012, this policy was supported by credit management seminars in which external experts from the banking and insurance industry played a prominent role. We also use factoring. We actively manage the most important ratios, such as DSO and debtor ageing trends.

Dependency on government subsidiesWe receive substantial subsidies from the government in two countries. Changes in subsidy legislation may have a negative effect. By diversifying the client portfolio we are able to realise price compensation and reduce our dependency on government subsidies.

With regard to the financial risks, please refer to explanatory note 3 in the financial statements.

Risks related to legislation and regulationsChanges to legislationChanges to legislation (such as minimum wage or equal pay) can have significant commercial implications. We are confronted with (potential) legislative amendments in a number of countries. Equal pay has recently come into effect in key sectors in Germany. The impact of this on the business and our systems has been analysed and measures have subsequently been taken to make the most of business opportunities. We have also adjusted our systems to ensure we continue to comply with legislation and regulations. Upcoming changes are generally monitored by initiating and participating in active dialogue with legislators through industry associations and sector organisations. Legally implemented increases in wage costs are communicated with our clients in a timely manner so that the increase can be passed on. In 2012 we also further strengthened the internal control measures with regard to the introduction and application of changes.

Compliance with labour law requirementsThe countries in which USG People operates have different collective labour agreements and often-complex local labour

laws. Operational quality management sees to it that collective labour agreements and local labour laws are correctly applied. Corporate staff departments subsequently assess whether regulations are complied with. These measures mitigate the risk of non-compliance with labour law requirements.

The risk profile has been discussed with the Supervisory Board. However, it cannot be ruled out that this summary may prove to be incomplete in the future. There may be additional risks of which we are currently unaware or risks which are currently classified as limited but which may turn out to have (greater) implications in the future.

STATEMENT OF THE EXECUTIVE BOARD REGARDING THE EVALUATION OF RISK MANAGEMENT AND INTERNAL CONTROLThe Executive Board is aware that risk management and control systems, however extensive they may be, are unable to provide absolute certainty that all material inaccuracies, losses, fraud and breaches of laws and regulations can be prevented entirely. The policy of the Executive Board remains focused on constantly monitoring and improving the internal risk management and control systems in order to make the processes as reliable and effective as possible. The Supervisory Board and audit committee are informed on the structure and operation of the internal risk management and control systems. It is the opinion of the Executive Board that the risk management and control systems functioned properly in the year under review with respect to the financial reporting risks. These systems provide a reasonable level of certainty that no material inaccuracies are contained in the financial reporting in the current year.

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

view of the assets, liabilities, financial position and profit or loss of the issuing institution and companies jointly included in the consolidation;

• TheannualreportofUSGPeoplegivesatrueandfairviewofthe position at the balance sheet date, the course of events during the financial year of USG People and the companies associated with it, the results of which are included in the financial statements;

• TheprincipalrisksfacingUSGPeopleareoutlinedintheannualreport.

069

CORPORATE GOVERNANCE

USG PEOPLE N.V. USG People N.V. is a limited liability company governed by Dutch law and listed on the stock exchange and governed by the Dutch large company regime. The ordinary shares of USG People are listed on NYSE Euronext Amsterdam. The corporate governance model is a two-tier management structure, with an Executive Board responsible for the day-to-day management of the company and a Supervisory Board whose duties include supervising the Executive Board’s actions and the way it manages the company. The two bodies operate independent of each other and are answerable to the General Meetings of Shareholders. The USG People Articles of Association were most recently amended on 1 February 2011.

GOVERNANCE STRUCTUREOne of the main purposes of good corporate governance is to gain and maintain the trust of all stakeholders – trust in the way business is managed 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 of sound corporate governance at USG People. In compliance with legislation and regulations, the company will provide all shareholders and all other parties at the same time with the same information on topics that could have a significant impact on the share price, subject to exceptions stipulated 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 as possible, ensuring that these values are adhered to throughout the organisation.

The Executive Board reassessed the strategy in October 2011, which in short focused on how USG People can serve specific markets with specific brands even better. This strategic reassessment also had consequences for the method of governance in the organisation, with governance by country being replaced by governance by brand. In addition to the five main brands there are currently a number of local brands. Transforming an organisation from governance by country to governance by brand requires the necessary attention, and USG People has made every effort to do so thoroughly and carefully. A total of 19 project groups were designated to deal with the changes in the field of Operation Design & Governance, HR, Finance, ICT, Tax and Legal. The vast majority of the transition took place in the course of 2012.

The main external legislation and regulations applicable to USG People are: • Dutchcivilcode;• NYSEEuronextlistingrules;• DutchCorporateGovernanceCode;• collectivelabouragreements;• DutchActonFinancialSupervision.

The main internal rules and regulations: • articlesofassociation;• codeofconduct;• internalregulationsoftheSupervisoryBoardandregulations of the internal committees;• internalregulationsoftheExecutiveBoard;• CorporateDelegationofAuthorityScheme(CDAS);• policy regarding bilateral contacts with shareholders, investors, analysts and media;• whistleblowerpolicy;• corporateguidelinesandpolicy,e.g.theTrackingCompliance Programme, Model Code and the Rules and Regulations governing Fraud.

In the past decade USG People has, if necessary, adjusted and further enhanced its governance model. The Dutch Corporate Governance Code from 2003 and subsequent amendments made in 2008 have played an important role in this respect. The Executive Board and the Supervisory Board believe that the existing corporate governance structure, as expanded on in more detail in this section, is the most suitable model at this time. With the exception of aspects of the corporate governance structure that can only be adapted with the approval of the General Meeting of Shareholders, the Executive Board and Supervisory Board will only adjust the corporate structure if it is in the best interests of the company. Any such changes will be expanded on in the annual report.

SUPERVISORY BOARD

EXECUTIVE BOARD

GENERAL STAFFING

(Start People)

PROFESSIONALS

(USG Professionals)

SPECIALIST STAFFING

(Unique)

(Secretary Plus)

(Technicum)

SHAREHOLDERS

REPORTS

THE EXECUTIVE BOARD

CompositionIn 2012 the Executive Board consisted of five people, namely Rob Zandbergen (CEO), Leen Geirnaerdt (CFO), Hubert Vanhoe (COO), Eric de Jong (COO) and Albert Jan Jongsma (CCO). The percentage of women on the Executive Board was 20% in 2012. That means that the Executive Board of USG People does not yet quite meet the 30% requirement stipulated in the Dutch Act on Management and Supervision (Wet Bestuur en Toezicht). USG People aims to achieve a wide and diverse composition of staff within all levels of the company and will take the requirements into consideration as much as possible in future appointments.USG People aims to achieve a well-balanced composition of the Executive Board, as stated under the diversity objectives in the report of the Supervisory Board.

DutiesThe Executive Board manages the business on a day-to-day basis and is responsible for the strategy, for setting and realising targets and for achieving results. The Executive Board is also responsible for the quality and completeness of the financial reports published by the company, for risk management and control mechanisms, for compliance with legislation and regulations and for the financing of USG People.

The Executive Board is bound by the Regulations of the Executive Board in addition to regulatory requirements and the relevant provisions of the Articles of Association. The Regulations of the Executive Board clearly state the division of duties of the individual directors. For example, the regulations state that the CEO’s duties include being responsible for Strategy, Innovation, Communication, Internal Audit and SR. The scope of the CFO’s duties includes responsibility for financial reporting, ICT, Investor Relations, Tax and Treasury. The COO’s duties include responsibility for the operational and commercial management of the brands, while the CCO is responsible for HR, M&A and Legal. As discussed above, as from 2012 the structure of the operating companies is no longer based on governance by country but instead by governance by brand, which inevitably had an impact on the method of management in the past year. Managing based on international governance by brand makes for a better comparison across borders, for the international use of best practices and it eliminates the need to reinvent the wheel. The transformation to governance by brand has not had any consequences for the vast majority of the organisation such as branch managers and general managers of the labels in each country. International comparisons have made the organisation more effective and efficient through the centralisation of certain support functions.

Individual members of the Executive Board can specifically be responsible for certain management duties, without prejudice to

the collective responsibility of the Executive Board as a whole. The Executive Board remains collectively responsible for decisions, even if these have been drafted by individual members of the Executive Board. The Executive Board is collectively authorised to represent the company both in judicial and other matters. The power of representation is jointly granted to two members of the Executive Board. This also applies for other directors, barring any legal and/or statutory reserves provided for by the Articles of Association. This is stipulated in the CDAS.

Appointment and dismissal of members of the Executive BoardThe members of the Executive Board are appointed by the Supervisory Board. The Supervisory Board nominates one or more candidates for appointment and informs the General Meeting of Shareholders of the proposed appointment. In principle the Supervisory Board appoints members of the Executive Board for a four-year term, unless there are compelling reasons for deviating from this. At the conclusion of the four-year term, the member of the Executive Board can be reappointed, in accordance with best practice provision II.1.1. of the Corporate Governance Code. The current members of the Executive Board have each been appointed for a period of four years.

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

RemunerationIn line with the remuneration policy that was approved by the General Meeting of Shareholders in May 2011, the remuneration of the members of the Executive Board is determined by the Supervisory Board, on the advice of the remuneration and appointments committee. The composition and amount of the remuneration, as well as an account of the remuneration policy, is included in the remuneration report. The main elements of the contracts with the Executive Board members can be found on the company’s website – along with the complete remuneration report.

THE SUPERVISORY BOARD

CompositionThe Supervisory Board consisted of six people until the General Meeting of Shareholders in May 2012: Cees Veerman (chairman), Christian Dumolin, Joost van Heyningen Nanninga, Rinse de Jong, Marike van Lier Lels and Alex Mulder. The term of Christian Dumolin expired in 2012 and the Supervisory Board has consisted of five people ever since. The percentage of women on the Supervisory Board was 20% at the end of 2012. That means that the Supervisory Board of USG People does not yet quite meet the 30% requirement stipulated in the Dutch Act on Management and Supervision (Wet Bestuur en Toezicht). USG People aims to achieve a wide and diverse composition

071

of staff within all levels of the company and will take the requirements into consideration as much as possible in future appointments. The Supervisory Board aims to achieve a well-balanced composition as stated under the diversity objectives in the Report of the Supervisory Board.

The Supervisory Board has two internal committees: the audit committee and the remuneration and appointments committee. For the composition of these internal committees as well as a detailed account of their activities please refer to the committees’ reports on page 41.

DutiesIt is the duty of the Supervisory Board to supervise the policy of the Executive Board and the way it manages the company. In doing so, the Supervisory Board takes into account the interests of all the company’s stakeholders, including shareholders, employees, clients and suppliers.

The Supervisory Board advises the Executive Board, both on request and at its own initiative, on topics including financial policy, risk management and control systems and the corporate structure. The Supervisory Board also discusses and assesses the corporate strategy on a regular basis.

The Supervisory Board must approve decisions pertaining to the following matters:• setting and altering the operational andfinancial targets of USG People;• setting and altering the strategy aimed at realising the corporate objectives;• settingandalteringtheparametersapplyingtothestrategy, for example with respect to the financial ratios;• settingandalteringtherelevantaspectsofcorporatesocial responsibility;• alltransactionsbetweenUSGPeopleandnaturalpersonsor legal entities in possession of at least 10% of the shares in USG People which are of material importance to USG People;• alltransactionsforwhichaconflictof interestmayexistfor the members of the Executive Board and which are of material importance to USG People and/or the members of the Executive Board involved;• all transactions for which a conflict of interest may exist for the members of the Supervisory Board and which are of material importance to USG People and/or the members of the Supervisory Board involved;• theappointmentanddismissalofthesecretaryofUSGPeople;• theappointmentofamemberoftheExecutiveBoardasCEO, CFO, COO or CCO;• the allocation of tasks of the Executive Board to individual members of the Executive Board;

• anyotheractsthatrequireapprovalbylaworasstipulated in the Articles of Association, the Regulations of the Executive Board, the Regulations of the Supervisory Board, the Dutch Corporate Governance Code or any other applicable rules and regulations.

The Supervisory Board is bound by the Regulations of the Supervisory Board in addition to the regulatory and statutory provisions and requirements. In addition, the remuneration and appointments committee and the audit committee each have their own regulations, to which the members of the Supervisory Board who sit on these committees must also adhere.

Appointment and retirement of members of the Supervisory BoardThe members of the Supervisory Board are appointed by the General Meeting of Shareholders on the recommendation of the Supervisory Board. Supervisory Board members are appointed for a maximum of three four-year terms. Members of the Supervisory Board retire by rotation according to the retirement rota. The deadline for Supervisory Board members to step down is the day of the first General Meeting of Shareholders to be held after four years have expired since they were last appointed.

RemunerationThe members of the Supervisory Board receive a fixed annual salary which is determined by the General Meeting of Shareholders. Further information on the composition and amount of the remuneration can be found in the remuneration report and in the section on remuneration in the annual report on page 42.

IndependenceUntil 9 May 2006 Alex Mulder was chairman of the Executive Board. In addition, as at 31 December 2012 he held 20.14% of the company’s stock. This means that not all members of the Supervisory Board can be considered to be independent in the sense of best practice provision III.2.2. of the Code.

THE GENERAL MEETING OF SHAREHOLDERSA General Meeting of Shareholders is held at least once a year. The agenda, annexes and registration process are published with the notice convening the meeting and are available on the company’s website. The annexes contain all relevant information with regard to resolutions on the agenda. All decisions are taken based on the ‘one share, one vote’ principle. All resolutions are adopted by an absolute majority of votes, unless otherwise provided by law or in the Articles of Association of the company.

The annual accounts are signed off by the Supervisory Board and are submitted annually to the General Meeting of Shareholders for adoption.

REPORTS

The General Meeting of Shareholders has control of important matters including:• adoptingthefinancialstatements;• profitappropriation;• thereservesanddividendpolicy;• approvingamendmentstotheArticlesofAssociation;• decidingontheremunerationpolicyoftheExecutiveBoard;• approvingtheremunerationoftheSupervisoryBoard;• transferringthecompanyorapartthereoftoathirdparty;• authorisingthepurchase,issueorsaleofsharesinthecapital of USG People;• appointingtheexternalauditor;• grantingthedischargeoftheExecutiveBoardand Supervisory Board.

The minutes of the General Meeting of Shareholders are made available no later than three months after the meeting, after which shareholders have a period of three months to respond.

OTHER STAKEHOLDERS AND ROLE IN SOCIETYUSG People attaches great importance to maintaining a good relationship with its shareholders and investors. In 2012 USG People organised an analysts’ day in addition to the regular roadshows and meetings. Members of the Executive Board, but also general managers, expanded on the revised strategy and recent market developments from different perspectives.

However, focusing solely on shareholder value does not do justice to USG People’s wider role in society: it helps people find a job, helps companies find employees and promotes a better flow in the job market, at every level. Stakeholders other than shareholders and investors are at least as important to USG People, and these include clients, employees, unions, the government, trade associations, employers associations and suppliers. That is why USG People organises stakeholder dialogue at least once a year, to discuss a wide array of topics and developments in the job market with a diverse group of stakeholders. This dialogue ensures that USG People is able to respond even quicker and more effectively to needs from within society and – if necessary – adjust its business model accordingly. In doing so USG People can continue to take the lead in the flexible labour playing field with an updated business model so that USG People is and remains a healthy, profitable and sustainable company – for the sake of both shareholders and other stakeholders. The ‘Stakeholders’ chapter in the SR report provides a detailed account of the way in which this dialogue is structured.

THE DUTCH CORPORATE GOVERNANCE CODE USG People applies a corporate governance policy in line with the Dutch Corporate Governance Code (hereinafter referred to as ‘the Code’) (see the Government Gazette no. 18499 of 3 December 2009 for the text of the Code). The Code is based

on the ‘comply or explain’ principle. That means that companies listed on the stock exchange are required to explain in their annual report how they complied with the Code and to give a motivated account of the principles pertaining to the Executive Board and Supervisory Board as well as of any best practices which have not been applied.

Deviations from the CodeUSG People is in full compliance with the Code. The only point in which the USG People policy deviates from the Code has been approved by the shareholders. The following provides an explanation of the best practice provision from which USG People deviates.

The new remuneration policy for the Executive Board for the period 2011-2014 came into force on 1 January 2011. The remuneration policy complies with the provisions of the Dutch Corporate Governance Code in all respects, with the exception of severance pay upon termination of an Executive Board member’s contract of employment in the event of a takeover of the company resulting in a change of control. In this case the termination payment shall amount to twice the fixed gross annual salary, including pension contribution, increased by one-twelfth of this fixed gross annual salary, including pension contribution, for each year of employment with USG People. However, this termination payment shall not exceed three times the fixed annual salary including pension contribution. This is at variance with provision II.2.8. of the Code. USG People applies this policy regarding severance pay in the event of a change of control in recognition of the long-term employment of members of the Executive Board and moreover, given the shareholder structure of USG People, to protect their position as directors of the company.

The remuneration policy was approved by the shareholders at the General Meeting of Shareholders on 26 May 2011 who thereby assented to the fact that with regard to severance pay in the event of a change of control USG People is in deviation from the provisions of the Code.

This section can be considered to be the corporate governance statement as referred to in Article 2a of the Dutch Decree on additional requirements for annual reports (Vaststellingsbesluit nadere voorschriften inhoud jaarverslag) as last amended as of 1 January 2010 (the ‘Decree’).

CAPITAL STRUCTURE AND PROTECTIVE MEASURE At 31 December 2012 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 and 100,000,000 preference shares. The issued capital at that date was 79,715,875 ordinary shares. Each ordinary share represents one vote.

073

Stichting Preferente Aandelen USG PeopleThe foundation ‘Stichting Preferente Aandelen USG People’ (hereinafter referred to as: ‘the Foundation’) was established in 2009. In accordance with its Articles of Association, the Foundation shall endeavour to serve the best interests of USG People, its associated businesses and all parties connected to it, warding off as much as possible any influences that could conflict with the continuity, independence and identity of the company. These influences may result from a (considerable) interest in USG People built up by a third party, the announcement of a public offer or other concentration of control, or any other form of unreasonable pressure exercised on the company to change the (strategic) policies of USG People.

The Articles of Association of USG People provide for the possibility of issuing preference shares as a temporary protective measure. USG People considers it undesirable for preference shares to remain outstanding for any longer than is strictly necessary. Accordingly, article 7.8 of the Articles of Association of USG People stipulates that in the event of the issue of preference shares a General Meeting of Shareholders shall be held no later than 18 months after the initial issuance of these shares. A decision concerning the buyback or cancellation of the preference shares must be put on the agenda for that meeting.

USG People has granted the Foundation a call option to take up preference shares. The call option is divided into two parts: the first call option entitles the Foundation to take 30% (minus one share) of the voting rights. The second call option grants the Foundation the right to take 100% (minus one share) of the total issued capital, i.e. shares other than preference shares, issued at that time. This second call option can only be exercised, in whole or in part, after the announcement of a public offer for all shares in USG People, as referred to in article 5:71 sub 1 part c of the Dutch Financial Supervision Act. The call option agreement means that the decision to issue preference shares lies with the Foundation and not with the Executive Board, nor the Supervisory Board of USG People.

In addition to the aforementioned call options, the Foundation also has the right of inquiry. The Foundation can make use of this right in situations where it may not wish to exercise its right to take preference shares but which, in the opinion of the Foundation, justify the need for legal intervention in view of the definition of its objects in the Articles of Association.

The Foundation will operate independently from USG People. In doing so, it is in compliance with the requirements stipulated in the Dutch Financial Supervision Act with respect to a foundation of this type. In 2012 the board of the Foundation consisted of Messrs R. Pieterse (chairman), J.F. van Duijne and Professor M.W. den Boogert. The board members have drawn up a retirement schedule aimed at ensuring the continuity, knowledge and expertise of the Foundation.

Issue of shares and preference rightsThe Executive Board is designated as the body authorised to take decisions regarding the issue of shares – subject to the approval of the Supervisory Board and in accordance with the stipulations of the Articles of Association and legal provisions. This authority relates to a maximum of 10% of all shares of the issued capital of USG People as at the time of issue. Each year the General Meeting of Shareholders is requested to extend this period for a period of 18 months from the date of General Meeting of Shareholders.

Every year the General Meeting of Shareholders is customarily requested to extend the period for which the Executive Board is designated as the body authorised to limit or exclude legal preferential rights. The extension applies to the same period for which the Executive Board is authorised to issue shares. The Executive Board will only exercise this authority if it is in the best interests of USG People to do so.

Buyback of own sharesAt the General Meeting of Shareholders on 10 May 2012 shareholders authorised the Executive Board – with the approval of the Supervisory Board – to buy back USG People shares for a period of 18 months as from 10 May 2012. Shares may be purchased under any agreement subject to the following conditions:• thebuybackmustnotexceed10%of theoutstandingshare capital; and• thepricemustbebetweenthenominalvalueand110%ofthe stock market value.

At the General Meeting of Shareholders held on 10 May 2012 shareholders also granted the Executive Board a mandate for a period of 18 months from 10 May 2012 to purchase – with the approval of the Supervisory Board – any preference shares placed with the Foundation. This buyback of preference shares may only take place at a price equal to the nominal value plus the current dividend and any dividend in arrears.

Major holdingsUnder the Dutch Financial Supervision Act, shareholders are required to report holdings that exceed certain set percentages to the Netherlands Authority for the Financial Markets (AFM).

At 31 December 2012 Alex Mulder held 16,055,031 shares, representing a 20.14% stake in USG People.

In addition ING holds the voting rights for a total of 6,899,972 shares, representing a 8.66% stake, through ING Investment Management Luxembourg S.A, ING Fund Management B.V. and ING Investment Management Belgium NV/SA.

REPORTS

Dividend policy The objective of USG People’s long-term dividend policy is a dividend payout of one-third of net profit before amortisation, adjusted for the effects of unrealised value adjustments to interest rate derivatives. It is determined each year whether the dividend will be offered in cash or fully in ordinary shares and whether it will be charged to the share premium reserve or to other reserves.

RISK MANAGEMENT AND CONTROL SYSTEMS A description of the internal risk management and control systems can be found on page 66 of the risk section. The Executive Board of USG People has issued a statement on page 69 of this annual report to the effect that with regard to financial reporting risks the internal risk management and control systems provide a reasonable degree of certainty that the financial reporting does not contain any errors of material importance and that the risk management and control systems functioned properly in the year under review. The Executive Board provides clear evidence in support of this, meaning that USG People is in full compliance with best practice provision II.1.5.

Securities transactionsMembers of the Executive Board and Supervisory Board must comply with the so-called Model Code. This regulation sets out how transactions involving securities of USG People should be conducted and prohibits trading during the so-called closed periods. Responsibility for Model Code compliance checks lies with the USG People Compliance Officer.

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

Conflicts of interestAny transactions involving a potential conflict of interest for members of the Executive Board or Supervisory Board must be published in the annual report. Under the Code, any such transactions are subject to agreement under the conditions customary for the sector. During 2012 no transactions took place which could be qualified as involving a conflict of interest. Provisions aimed at preventing conflicts of interest with respect to such transactions are included in the Regulations of the Executive Board and the Regulations of the Supervisory Board.

AuditorThe independence of the external auditor is intrinsically valuable. To ensure its independence USG People has drafted the policy included in the annex to the Supervisory Board regulation entitled ‘Policy governing the independence of the external auditor’. The policy covers the rotation and appointment of the external auditor, as well as the basic principles of independence. Upon the recommendation of the audit committee and approval of the Executive Board, the Supervisory Board is responsible for the remuneration of the external auditor and instruction to provide non-audit services.

The General Meeting of Shareholders held in May 2011 appointed PricewaterhouseCoopers Accountants N.V. for a period of two years, i.e. to audit the annual accounts for the 2011 and 2012 financial years. The auditor’s report is included elsewhere in the annual report. At the General Meeting of Shareholders on 8 May 2013 the Supervisory Board will propose the reappointment of PricewaterhouseCoopers Accountants N.V. for the next three years.

075

OUTLOOK

Labour market dynamics are highly dependent on economic cycles. 2012 was a year of low economic activity and declining business confidence in the European countries in which USG People offers its services. Many countries were dealing with problems arising from excessive public debt, with global economic growth in decline. This put a brake on demand for workers, resulting in a drop in revenue for USG People. In the course of the year European government leaders announced austerity measures and reforms. In addition, in the summer of 2012 the European Central Bank launched a plan to allow unlimited government bond-buying in a bid to support the monetary union. This averted some of the risks in the Eurozone and put an end to a volatile period in the financial markets. Later in the year and at the start of 2013 several macroeconomic indicators appeared to show that the low point of the recession had passed, paving the way for renewed growth in confidence and possible recovery.

The impact of the economic cycle is accompanied by an underlying trend on labour markets of increasing flexibility and demand for increased adaptability on the part of both workers and companies. Due to technological changes people will also have to continue to invest in training in order to maintain their employability throughout their entire working life. These trends provide USG People, as a specialist in flexible staffing solutions, with attractive opportunities for the longer term.

USG People is responding to the aforementioned trends and has created a promising basis for the years to come through the operational optimisations that have been implemented in recent years in the front and back office, as well as through its strategic plans of action.

REPORTS 077

FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet as at 31 December

Consolidated statement of change in shareholders’ equity

Consolidated statement of cash flows

Notes to the consolidated financial statements

1 General information

2 Summary of significant accounting policies

3 Financial risk management

4 Estimates and judgements by management

5 Acquisitions and divestments of subsidiaries

6 Operating segments

7 Cost of sales

8 Selling, general and administrative expenses

9 Share-based payments

10 Other income and expenses

11 Finance cost

12 Finance income

13 Income tax expense

14 Property, plant and equipment

15 Goodwill

16 Other intangible assets

17 Financial fixed assets

18 Deferred income tax asset and liability

19 Trade and other receivables

20 Cash and cash equivalents

21 Capital and reserves attributable to equity holders

22 Earnings per share

23 Non-current interest-bearing borrowings

24 Pension-related assets and liabilities

25 Provisons

26 Bank overdrafts and borrowings

27 Trade and other payables

28 Derivative financial instruments

29 Commitments

30 Contingent assets and liabilities

31 Related parties

32 Events after balance sheet date

33 Principal subsidiaries and associates of USG People N.V.

080

080

080

081

082

083

084

084

084

091

097

097

101

104

104

105

112

112

113

113

115

116

118

119

119

121

122

122

123

124

126

128

129

130

130

130

131

131

131

132

080

FINANCIAL STATEMENTS

134

134

134

135

135

135

136

136

137

137

137

138

138

139

139

139

139

139

140 OTHER DATA Events after balance sheet date

Provisions in the articles of association

regarding profit appropriation

Profit appropriation

Independent auditor’s report

146

146

146

147

148

134


Company income statement

Company balance sheet at 31 December (before profit appropriation)

Notes to the company income statement and balance sheet

1 Accounting principles for preparing the company financial statements

2 Intangible assets

3 Property, plant and equipment

4 Subsidiaries

5 Other financial fixed assets

6 Deferred taxes

7 Other current receivables

8 Equity

9 Provisions

10 Non-current liabilities

11 Current liabilities

12 Employees

13 Liability

14 Audit fees

15 Remuneration of Executive Board and Supervisory Board

079

note: amounts in thousands of euros 2012 2011

6 Revenue 2,876,204 3,244,7727 Cost of sales -2,279,598 -2,564,572 Gross profit 596,606 680,200 8 Selling expenses -422,723 -526,4888 Amortisation and impairment of acquisition-related intangible assets -230,100 -36,196 Total selling expenses -652,823 -562,684 8 General and administrative expenses -108,220 -121,90410 Other income and expenses -88 2 Total operating expenses -761,131 -684,586 Operating income -164,525 -4,386 11 Finance costs -22,672 -26,09012 Finance income 10,705 7,186 Income before tax -176,492 -23,290 13 Income tax expense -20,879 -16,783 Net income from continuing operations -197,371 -40,073 5 Net income from discontinued operations 5,620 - NET INCOME -191,751 -40,073 ATTRIBUTABLE TO: Equity holders of the company -191,834 -40,159 Minority interests 83 86

-191,751 -40,073 EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (in euros, per share of € 0.50 nominal)

22 Basic - € 2.42 - € 0.5122 Diluted - € 2.42 - € 0.51

CONSOLIDATED INCOME STATEMENT

amounts in thousands of euros 2012 2011

Net income -191,751 -40,073 Other comprehensive income after tax: Currency translation differences 370 -336 Other comprehensive income after tax 370 -336 TOTAL COMPREHENSIVE INCOME -191,381 -40,409 ATTRIBUTABLE TO: Equity holders of the company -191,464 -40,495 Minority interests 83 86 -191,381 -40,409

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER

note: amounts in thousands of euros 2012 2011 NON-CURRENT ASSETS 14 Property, plant and equipment 26,869 33,64915 Goodwill 719,950 920,42816 Other intangible assets 69,983 81,58417 Financial fixed assets 14,742 12,35418 Deferred income tax assets 70,987 74,18324 Other non-current assets 5,127 5,503 907,658 1,127,701 CURRENT ASSETS 19 Trade and other receivables 398,750 465,782 Current income tax receivables 6,628 5,56520 Cash and cash equivalents 35,355 55,865 440,733 527,212 TOTAL ASSETS 1,348,391 1,654,913 21 EQUITY Capital and reserves attributable to equity holders of the company Share capital 406,390 406,390 Legal reserves 1,137 14,877 Retained earnings 90,534 273,986 498,061 695,253 Minority interests 551 542 Total equity 498,612 695,795 NON-CURRENT LIABILITIES 23 Borrowings 216,671 121,67524 Pension-related liabilities - 1825 Provisions 14,905 12,17318 Deferred income tax liabilities 13,170 26,595 244,746 160,461 CURRENT LIABILITIES 26 Bank overdrafts and borrowings 62,587 140,54727 Trade and other payables 481,349 556,632 Current income tax liabilities 15,989 31,50728 Derivative financial instruments 6,228 13,17025 Provisions 38,880 56,801 605,033 798,657 Total liabilities 849,779 959,118 TOTAL EQUITY AND LIABILITIES 1,348,391 1.654,913

081

CONSOLIDATED STATEMENT OF CHANGE IN SHAREHOLDERS’ EQUITY

TOTAL EQUITYMINORITY

INTERESTSSUB-TOTALRETAINED

EARNINGSLEGAL

RESERVESSHARE

CAPITAL

Balance as at 1 January 2011 406,300 16,332 317,612 740,244 554 740,798 Net income - - -40,159 -40,159 86 -40,073 Currency translation differences - -336 - -336 - -336 Total comprehensive income - -336 -40,159 -40,495 86 -40,409 9 Change share plan - 1,056 - 1,056 - 1,056 Change resulting from issuance of new shares under share plan 90 -2,175 2,175 90 - 90 Dividend for 2010 - - -5,642 -5,642 - -5,642 Dividend paid to holders of minority interests - - - - -98 -98 90 -1,119 -3,467 -4,496 -98 -4,594 BALANCE AS AT 31 DECEMBER 2011 406,390 14,877 273,986 695,253 542 695,795 Balance as at 1 January 2012 406,390 14,877 273,986 695,253 542 695,795 Net income - - -191,834 -191,834 83 -191,751 Currrency translation differences - 370 - 370 - 370 Total comprehensive income - 370 -191,834 -191,464 83 -191,381 9 Change share plan - 606 - 606 - 60621 Change resulting from repayment of convertible bond - -14,716 14,716 - - - Dividend for 2011 - - -6,334 -6,334 - -6,334 Dividend paid to holders of minority interests - - - - -74 -74 - -14,110 8,382 -5,728 -74 -5,802 BALANCE AS AT 31 DECEMBER 2012 406,390 1,137 90,534 498,061 551 498,612

ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

note: amounts in thousands of euros


CONSOLIDATED STATEMENT OF CASH FLOWS

note: amounts in thousands of euros 2012 2011 CASH FLOW FROM OPERATING ACTIVITIES Income before tax -176,492 -23,290 Adjustments: 14, 16 Depreciation, amortisation and impairment of tangible and intangible assets 253,601 67,80514, 16 Result on sale of tangible and intangible assets 766 52711 Finance costs 22,672 26,090 Finance income -10,705 -7,1869 Share plan expenses processed via equity 606 1,056 Currency translation differences 338 -32624, 25 Change in pension-related liabilities and provisions -16,053 37,93924 Change in other non-current assets 376 545 Changes in working capital: - trade and other receivables 70,177 14,204 - trade and other payables -76,370 5,278 Cash flow from operating activities 68,916 122,642 Income tax paid -39,879 -18,033 Net cash flow from operating activities 29,037 104,609 CASH FLOW FROM INVESTMENT ACTIVITIES 5 Acquisitions of subsidiaries -14,971 -8,62214 Investments in property, plant and equipment -6,437 -7,74316 Investments in intangible assets -13,135 -11,70514, 16 Sale of tangible and intangible assets 588 6205 Divestment of subsidiary -3,528 -17 Payments on borrowings and guarantee deposits -1,461 -948 Net cash flow from investment activities -38,944 -28,398 CASH FLOW FROM FINANCING ACTIVITIES 21 Proceeds from issuance of shares - 9028 Payments on derivatives -9,233 -7,66923 Proceeds from borrowings 143,996 53,55723 Repayments of borrowings -128,700 -81,676 Interest paid -9,310 -11,107 Interest received 1,421 810 Dividend paid to minority interest holders -74 -98 Dividend paid -6,334 -5,642 Net cash flow from financing activities -8,234 -51,735 DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS -18,141 24,476 CHANGE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents and bank overdrafts as at 1 January 39,543 15,067 Decrease / increase in cash and cash equivalents -18,141 24,476 20 CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AS AT 31 DECEMBER 21,402 39,543

083

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 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 in Almere, the Netherlands. The shares of the company are listed on the NYSE Euronext Amsterdam stock exchange. The address of the company is:Landdrostdreef 1241314 SK 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 and customer care. The group operates in ten countries.

The consolidated IFRS financial statements of the company for the year ended 31 December 2012 comprise the company and its subsidiaries (together referred to as ‘the group’). An overview of the main subsidiaries can be found in note 33.

The financial statements were prepared by the Executive Board. The financial statements were signed by the Supervisory Board on 27 February 2013 and will be submitted to the General Meeting of Shareholders on 8 May 2013 for adoption.In the preparation of the financial statements of USG People N.V. the exemption contained in article 402 Book 2 of the Dutch Civil Code was applied with respect to the company income statement.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of the financial statementsThe consolidated financial statements for 2012 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted within the European Union.

The financial statements are presented in euros (€). 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 (including derivative instruments) are initially recognised at fair value. Subsequent valuations of receivables and monetary financial liabilities are based on amortised cost. Subsequent valuations of derivatives 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 the principles of valuation. The estimates made and the related assumptions are based on historical experience and various other factors which are

considered to be reasonable under the given circumstances. The estimates and assumptions serve as the basis for assessing the value of recognised assets and liabilities whose amounts cannot currently be determined from other sources. Actual results may differ from the estimates. Information on assessments and evaluations that may have a significant impact on the financial statements are stated in note 4.

The principles of valuation and determination of results have been applied consistently by the group companies during the periods presented in these consolidated financial statements.

Standards, amendments and interpretations effective from the 2012 financial yearChanges to standards effective from 2012 do not have a material impact on the group and have no impact on earnings, nor on equity and the notes.

Standards, amendments and interpretations not effective in the 2012 financial year, but applicable to the groupIAS 1 ‘Financial Statements presentation’, whereby the main amendment relates to the classification of items of comprehensive income which can and cannot potentially be reclassified to the income statement. The application of this amendment is mandatory for financial years commencing on or after 1 July 2012. The amendment has no impact on the manner in which the comprehensive income of the group is presented.

IAS 19 ‘Employee Benefits’. The amended standard eliminates the option to defer the recognition of actuarial gains and losses over future periods (the so-called corridor approach). Actuarial gains and losses will have to be directly recognised in other comprehensive income as soon as they occur. In addition, unrecognised pension expenses relating to the past period of employment must be recognised directly in the income statement. The interest costs and the expected return on investments are replaced by a net interest amount calculated on the net liability or asset using a discount factor. Administration costs are recognised in the income statement, administrative expenses in other comprehensive income. The application of this amendment is mandatory for financial years commencing on or after 1 January 2013. Application of the amended standard with effect from 31 December 2012 would have resulted in a € 10.2 million reduction in equity, due to the deduction of unrealised actuarial losses. Operating income would have been € 810 higher in 2012.

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 2015. The group is currently reviewing the impact of this amendment.


IFRS 10 ‘Consolidated Financial Statements’. This standard identifies the concept of control as the determining factor in whether an entity should be included in the consolidated financial statements of the parent company and provides additional guidance where the determination of control is difficult to assess. Application is mandatory for financial years commencing on or after 1 January 2014. This new standard has no impact on the size or composition of group equity and income.

IFRS 12 ‘Disclosure of Interests in Other Entities’. This standard defines the disclosure requirements for all forms of interests in other entities, including associates and off balance sheet vehicles. Application is mandatory for financial years commencing on or after 1 January 2014. This new standard has no impact on the size or composition of group equity and income.

IFRS 13 ‘Fair Value Measurement’. This standard defines fair value and is the only framework for measuring fair value and the disclosure requirements for all IFRS standards. It provides guidance on how to apply fair value, but is not intended to be an expansion of fair value measurements. Application is mandatory for financial years commencing on or after 1 January 2013. This new standard is not expected to have an impact on the size or composition of group equity and income.

Other amendments of standards and interpretations which are not yet in effect are not expected to impact the amount of income, equity or the notes.

2.2 Consolidation of subsidiariesSubsidiaries are all entities over which the group has direct or indirect control of the financial and operating policy, in general either through ownership of a majority of the voting rights or through any other means of controlling their financial and operating activities. Subsidiaries are fully consolidated from the date on which the group gains decision-making control and are deconsolidated from the date on which that control ends.

The acquisition method applies to the initial recognition of subsidiaries by the group. The consideration transferred for the acquired company is based on the fair value of the assets ceded, the equity instruments issued and liabilities incurred or assumed at the transaction date, including contingent considerations. Contingent considerations (earn-outs) are owed if pre-determined conditions laid down in a contract have been met. The likeliness of a contingent consideration being paid is considered in the valuation on the transaction date and is reconsidered at each balance sheet date. Changes in the value of contingent considerations are recognised in the income statement along with the transaction-related costs. Changes in the value of contingent considerations for acquisitions are recognised in goodwill up to and including 2009.

Acquisition-related transaction costs are recognised in the income statement.

The stake of the acquired company which was already in the group’s ownership prior to the time of acquisition is recognised at fair value. Changes in the value are recognised as finance costs or finance income in the income statement.

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

The positive difference between the consideration transferred for the acquired entity and the fair value of assets and liabilities that are identifiable is recognised as goodwill. In the event of the consideration transferred for the acquired entity being lower than the fair value, the difference is recognised in the income statement.

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

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

085

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

In 2012 the group was structured into divisions and further analysed on a country basis. The Executive Board based its decisions on this. Disclosure on the operating segments is in keeping with this geographical division, with a number of divisions in several countries 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 each entity operates (the functional currency). The consolidated financial statements are presented in euros (€), this being the group’s functional and presentation 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. Currency translation differences resulting from the settlement of these transactions and the translation of the monetary assets and liabilities denominated in foreign currency at the balance sheet date are recognised as finance costs or finance income 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 rate applicable at the balance sheet date;

• income and expenses are translated into euros at ratesapproximate to the exchange rates applicable at the date of the transaction;

• currencytranslationdifferencesarerecognisedin comprehensive income.

In the event of the complete or partial sale of foreign group companies with a currency other than the euro, translation differences are recognised in the income statement as income from discontinued operations.

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.

Assets under construction, in the event the period of construction is longer than a year, includes attributable finance costs for which an interest rate is applied equal to the average rate of interest paid by the group.

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

The residual value, method of depreciation and depreciation period are reviewed annually at the balance sheet date and adjusted if necessary by a change 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 at acquisition date of the identifiable assets, liabilities and contingent liabilities acquired. For the purpose of impairment testing, goodwill is allocated to those groups of cash-generating units expected to benefit from the acquisition. Each unit or group of units to which goodwill is allocated represents the lowest level within the group for which the goodwill is monitored for internal purposes. Goodwill is monitored at the level of the cash-generating units or at a lower level if the Executive Board monitors the goodwill of a unit at a lower level.

Goodwill is not amortised but is subject to impairment testing at least once a year. Impairment testing is carried out more often in the case of events or changes in circumstances that may necessitate an impairment. Impairments are recognised directly as expenses and are not reversed at a later stage.

If an entity is divested, the carrying amount of its goodwill is recognised in income. Goodwill directly attributable to the divested unit is written off. 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 value of the group of cash-generating units.

CATEGORY YEARS

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


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

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 is capitalised insofar as its cost price arises from the development and test phase of an project and insofar as it can be demonstrated that: • theprojectistechnicallyfeasibleandsuitableforuse;• itistheintentiontocompletetheprojectandusethesoftware;• the software will generate proven economic benefits in the

future;• technical,financialandothermeansareinplacetocomplete

and use the software; • 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 a 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 equal to the average interest rate paid by the group.

Software has a finite useful life and is subsequently carried at cost less amortisation and impairment. Amortisation cost is charged to the income statement using the straight-line method based on an estimated useful life of five to ten years.

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. Assets subject to amortisation are assessed annually as to whether events or changes may necessitate an impairment.

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 an asset’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 cash flows using a pre-tax discount factor which reflects both the current market assessment of the time value of money and the specific risk connected with the 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 is monitored for internal purposes. Non-financial assets other than goodwill that have been subject to impairment are assessed at each reporting date for possible 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 or determinable repayment terms. Loans and receivables are recognised under current assets, except if the maturity date is more than twelve months after the balance sheet date, in which case they are classified as non-current assets. Loans and receivables consist of ‘trade and other receivables’ (see 2.10) and cash and cash equivalents (see 2.12).

2.9.2 Guarantee depositsGuarantee deposits (mainly rental guarantees and guarantees connected with the running of a temporary staffing business) that do not have a fixed maturity date are recognised at cost. Guarantee deposits that do have a fixed maturity date are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

2.9.3 AssociatesAssociates are interests held over which the group has significant influence (not being subsidiaries over which the group may exercise decision-making control). 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. Changes in valuation as a result of attributable results from the associates are recognised in the income statement.

CATEGORY YEARS

Trademarks 10Customer relationships 9Candidate databases 6

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2.10 Trade and other receivablesTrade and other receivables are initially recognised at fair value and subsequently at amortised cost using the effective interest method (often nominal value) less impairment for bad debts. Reasons for recognising a bad-debt provision include major financial problems on the part of the debtor or the passing of more than 180 days after the payment due date. Experience shows that if a receivable has not been collected more than 180 days after the agreed payment date, it is unlikely that it will be collected. The amount of the provision is the difference between the carrying amount of the receivable and the present value of expected future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced by the amount of the bad debt provision and the associated expenses are included in selling expenses. If a trade receivable or other receivable is uncollectible, it is charged to the bad debt reserve. Collection 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 these receivables have been transferred. The criterion applicable in this context is the substantial transfer of risks and rewards. Factoring fees are recognised 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 are subsequently recognised at fair value at each reporting date. Changes in the fair value of derivative financial instruments are recognised directly in the income statement. The group does not apply hedge accounting as set out in IAS 39.

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 are recognised as borrowings on the balance sheet under current liabilities.

2.13 Share capitalShare capital is defined as equity attributable to shareholders of the company. Costs directly connected to the issuance of new shares or option rights are deducted from the proceeds recognised in equity. If any entity belonging to the group purchases USG People N.V. shares, the amount paid, including any associated costs (after taxes), is charged to equity attributable to shareholders of the company until such a time as the shares are cancelled or reissued. The amount received on the

issue of shares previously purchased, less any associated costs (after taxes), is added to the equity attributable to shareholders of the company.

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 option between 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 interest-bearing borrowingsBorrowings are initially recognised in the financial statements at fair value, net of transaction costs incurred, and are subsequently recognised at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the 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 at least twelve months after the balance sheet date.

2.16 Subordinated convertible bondThe subordinated convertible bond was repaid in 2012. The fair value of that part of the convertible bond considered to be a liability was determined using the market interest rate on a comparable, non-convertible bond. The amortised cost was recognised as a liability until the end of the term of the bond. The remaining proceeds were attributable to the conversion option and are recognised in the legal reserves in equity net of tax. A reclassification took place from the legal reserves to retained earnings after the repayment of the subordinated convertible bond.


2.17 LeaseLease contracts whereby the risks and rewards associated with ownership lie wholly or primarily with the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement for the duration of the lease using the straight-line method.

Lease contracts whereby the risks and rewards associated with ownership actually lie with the group are classified as financial leases. Assets acquired via a financial lease are carried at the lower of fair value and the cash value of the minimum required lease payments at the start of the lease. The lease payments are recognised partly as settlement of the outstanding liability and partly as finance costs. The interest expense is charged to each period in the entire lease period in such a way that it results in a constant periodical interest rate on the outstanding balance of the liability. Property, plant and equipment acquired via a financial lease are amortised for the period of useful life or for the duration of the lease contract, which ever is shorter.

2.18 Current and deferred income tax assets and liabilitiesIncome-based tax on the income for the financial year comprises current and deferred income taxes for the period under review. Income-based tax is recognised in the income statement except where it relates to items booked in comprehensive income or directly in equity. In the latter case, the associated 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 have been enacted or substantially enacted at the balance sheet date. Management periodically monitors the positions taken when filing tax returns, taking into account various legal interpretations. If necessary, liabilities are recognised based on expected tax liabilities.

Deferred income tax is recognised in the financial statements for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. However, deferred income tax liabilities are not carried when initially recognising goodwill.Deferred income tax is calculated using tax rates (and legislation) that have been enacted or substantially enacted at the balance sheet date and are expected 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 likely that future taxable profit will be available to offset the temporary differences and available 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.

2.19 Pension-related liabilities2.19.1 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 income statement in the period to which they pertain. The group has no obligations other than the payment of premiums.

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

The group’s net liability in regard to allocated pension rights is determined separately for each scheme on the basis of the present value of the liability under 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 19.104). The discount factor is the return at balance sheet date on solid corporate or government bonds with a maturity similar to the term 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 which are greater than 10% of the greater of the value of the plan assets or liabilities are added or charged to the result during the expected average remaining years of service of the employees concerned. In the event of changes in the pension scheme, unrecognised pension costs for years of service completed are recognised directly unless the changes in the pension scheme are conditional on employees remaining in service for a certain period of time (the vesting period). In this case the past-service costs are amortised on a straight-line basis over the vesting period.

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2.20 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 tax and social security premiums relating to these shares (settled in cash), is recognised as an expense in the income statement. Non-market related performance conditions such as revenue, profitability and expected staff turnover are included in the estimate of the ultimate total number of shares to be granted. The estimate of the ultimate total number of shares to be granted is revised at balance sheet date on the basis of the performance conditions. The actual performance conditions and staff turnover are determined at the end of the performance period and on the date that the granting becomes unconditional. Any effect of this revision and final determination is recognised in the income statement. The expenses are recognised on a time-weighted basis over the period to which the performance pertains. In the event of cancellation, either at the initiative of the staff member or of the employer, unrealised expenses pertaining to the period between the cancellation and the end of the performance period are recognised at once as an expense in the income statement.

A legal reserve is maintained in equity for the expected expense based on fair value of the shares to be granted, as determined on the day of granting. The expenses relating to the tax commitments for participants in the share plan payable by the group are recognised at fair value, as determined on the reporting date and at the time of settlement. These expenses are recognised on a time-weighted basis over the period to which the performance pertains and in the financial statements under the provisions.

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. The total amount recognised as an expense in the income statement during the performance period is determined by the fair value of the (conditionally) granted SARs. The USG People N.V. share price is a market-related condition which partly determines the 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 is recognised in the income statement. Expenses are recognised on a time-weighted basis over the conditional period of the SARs. A provision is maintained for this purpose.

2.21 Provisions2.21.1 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 and where 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 this is material, provisions are determined by calculating the present value of estimated future cash flows using a pre-tax discount factor which reflects the current market assessment of the time value of money and, if necessary, specific risks connected with the commitment. Future losses are not accounted for.

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

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

2.21.4 Exit-payment schemesThe net liability for deferred employee remuneration equals the amount of future payments due to employees for services rendered in current and past periods. The net liability of the group in regard to the exit scheme (not being pension provisions) equals the amount of future payments based on accrued years of service.

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


2.23 Income2.23.1 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. The group’s income is mainly derived from the provision of services to third parties after deduction of sales tax and discounts granted. These services mainly concern:• Temporaryemploymentandsecondmentservices:provisionof

temporary staff whereby hours worked at agreed rates during the financial reporting period are recognised as revenue.

• Recruitmentandselectionservices:recruitmentandselectionof employees for third parties whereby revenue is booked once the service has been completed as agreed.

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

• Reintegration services: supporting of reintegration servicesfor third parties based on an hourly rate, for hours worked during the reporting period.

• IT and engineering projects: fees based on a set price arerecognised 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.

• Outplacement:provisionofcoachingtojobseekers.Revenueisdetermined 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.

2.23.2 Other income and expensesOther income and expenses arise from activities other than regular business activities, such as the disposal of non-monetary assets or debts and associated interests.

2.24 Finance costs and incomeFinance costs comprise interest due on funds drawn, calculated using the effective interest method, downward adjustments to the fair value and realised value of derivative financial instruments and interest recognised with respect to accrued interest on contingent considerations relating to acquisitions.

Finance income comprises interest received on outstanding monies and upward adjustments to the fair value and realised value of derivative financial instruments.

2.25 Net earnings per shareNet earnings per ordinary share is calculated as the net income attributable to ordinary shareholders divided by the weighted average number of outstanding shares for the relevant period. Dividend distributed in shares, whereby there is no option for a cash settlement, is recognised as allocation of bonus shares. Earnings per share are adjusted accordingly in the comparative figures.

2.26 Principles 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, investment and financing activities. Cash flows in foreign currencies are translated at the rate at the transaction date. Income and expenditure before income tax is recognised as cash flows from operating activities. Interest paid and received is included under cash flow from financing activities. Cash flows arising from the acquisition or divestment of financial interests (subsidiaries and associates) are recognised as cash flows from investment activities, taking into account 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.

3 FINANCIAL RISK MANAGEMENT

3.1 Financial risk factorsBecause of the nature of its activities, the group is exposed to various financial risks: market risks (including cash flow and interest rate risks and exchange rate risks), credit risks and liquidity risks. The risk management and control model supports management in identifying and analysing the different risks.

While the financial and economic crisis of the past few years has led to greater focus on financial risks, it did not have to result in a substantial change in the group’s financial risk policy. The group focuses on cost containment. Specific attention is being paid to credit management, both in terms of managing credit risks and reducing the number of days sales outstanding. Risks are further reduced by selling some trade receivables to factoring companies.

The group further reduced liquidity risk in 2011 through the early repayment of the existing syndicated loan, replacing it with a new syndicated credit facility. The previous facility was scheduled to mature in the fourth quarter of 2012 and the new five-year facility (July 2016) enables the group to meet its financing requirements. Further information is provided at note 23 ‘Non-current interest-bearing borrowings’.

091

Group risk management focuses on minimising the potential negative effects of developments on the financial markets on the group’s performance. Where deemed necessary, the group uses financial instruments to hedge certain risks. The treasury department identifies and assesses financial risks and hedges

them subject to approval by the Executive Board.

The group recognises the following categories of financial instruments:

Financial fixed assets 14,742 - 7,931 15,907Trade receivables 374,625 - 374,625 384,237Other receivables (being financial instruments) 4,813 - 4,813 4,813Cash and cash equivalents 35,355 - 35,355 35,355 429,535 - 422,724 440,312 ‘Start’ subordinated loan 18,241 - 18,225Syndicated loan 213,679 - 215,288Contingent consideration acquisitions 2,061 - 2,061Other non-current credit facilities 2,383 - 2,790Commercial paper programmes 28,941 - 28,941Bank overdrafts and borrowings 13,953 - 13,953Trade and other payables (being financial instruments) 471,477 - 471,477Financial derivatives - 6,228 6,228 750,735 6,228 758,963

MAXIMUM CREDIT RISK

FAIR VALUE

ASSETS & LIABILITIES MEASURED AT FAIR

VALUE IN THE INCOME STATEMENT

RECEIVABLES AND LOANS 31 DECEMBER 2012

Financial fixed assets 12,354 - 5,990 13,945Trade receivables 428,278 - 428,278 438,599Other receivables (being financial instruments) 14,307 - 14,307 14,307Cash and cash equivalents 55,865 - 55,865 55,865 510,804 - 504,440 522,716 Subordinated convertible bond 111,567 - 113,849‘Start’ subordinated loan 29,891 - 29,690Syndicated loan 98,326 - 100,220Contingent consideration acquisitions 2,587 - 2,587Other non-current credit facilities 3,529 - 3,984Bank overdrafts and borrowings 16,322 - 16,322Trade and other payables (being financial instruments) 544,462 - 544,462Financial derivatives - 13,170 13,170 806,684 13,170 824,284

MAXIMUM CREDIT RISK

FAIR VALUE

RECEIVABLES AND LOANS 31 DECEMBER 2011

ASSETS & LIABILITIES MEASURED AT FAIR

VALUE IN THE INCOME STATEMENT


3.1.1 Market risksCash flow and interest rate riskFunds drawn from borrowings granted at variable interest rates expose the group to cash flow and interest rate risks. On the one hand the group, as a provider of employment services, views variable interest rates as a natural hedge for fluctuations in operating income while, on the other hand, it wants to remain vigilant and be able to respond to any opportunities that arise.

The group regularly uses various simulated scenarios to ascertain whether existing measures to hedge the cash flow and interest rate risks remain adequate. The analysis focuses 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, with the risk partly hedged by financial derivatives.

An increase of 50 basis points in the one-month EURIBOR rate has a negative impact of € 0.9 million on income before taxes (2010: positive impact of € 1.0 million), taking hedging measures into account and with all other factors being equal, and based on the financial instruments at the end of the financial year. A decrease of 50 basis points in the one-month EURIBOR rate has a positive impact of € 1.2 million (2010: negative impact of € 1.0 million) on income before taxes, taking hedging measures into account and with all other factors being equal.

Note 28 describes which financial derivatives the group uses to hedge the cash flow and interest rate risk.

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

Exchange rate riskIn view of the limited volume of group activities in currencies other than the euro (revenue less than 2.5% of total revenue and assets less than 1.5% of total assets), exchange rate risks are not hedged. Fluctuations which can reasonably be expected in relevant currency exchange rates versus the euro do not have a significant impact on group income or equity.

A limited amount of the borrowings (€ 611) is issued in a 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 from governments and financial institutions in the Netherlands are not insured. Where a trade receivable is not insured, the client’s creditworthiness is assessed prior to the service being supplied, taking past experiences and other

considerations into account. Credit limits are assigned to clients based on 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 ratios. The group has an information 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 the credit insurer. Good results are achieved through monthly discussions with the insurance company and internal monitoring of the credit risks. Credit meetings are held monthly in all countries to discuss all aspects of the trade receivables. The Executive Board is informed regularly on developments in its credit management policy. Note 19 ‘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 financial instruments and deposits.

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

The principal conditions of the syndicated loan concern the senior leverage ratio (which needed to be kept equal to or below 3.0) and the interest coverage ratio (equal to or above 3.5). Both ratios are reported to the banks on a quarterly basis. At end-2012 an amount of € 326 million (2011: € 519 million) had not yet been used in the syndicated loan. Taking into account the senior leverage ratio, the unused part of the loan was € 72 million.

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Senior leverage ratioThe senior leverage ratio according to the banking convenant was as follows as at 31 December:

The increase in the senior leverage ratio in the fourth quarter of 2012 was the result of the repayment of the convertible bond in October 2012 which, in accordance with the terms and conditions agreed with the syndicate of banks, was not included in the net debt position. Repayment was financed by drawing on tranche C of the syndicated loan, set up for this purpose.

Interest cover ratioThe interest cover ratio, as defined in the covenant with the banks, was as follows on 31 December:

2012 2011

Bank loans and borrowings 279,258 262,222Minus: cash and cash equivalents -35,355 -55,865 Total net debt position 243,903 206,357Minus: ‘Start’ subordinated loan -18,241 -29,891Minus: subordinated convertible bond - -111,567Plus: adjustments in accordance with terms and conditions of covenant 6,490 3,343 Net debt position in accordance with terms and conditions of covenant 232,152 68,242 Operating income -164,525 -4,386Plus: depreciation, amortisation and impairment 253,601 67,805Plus: adjustments in accordance with terms and conditions of covenant 13,121 59,340 EBITDA 102,197 122,759 Senior leverage ratio (net debt position / EBITDA) 2.3 0.6

The senior leverage ratio in recent quarters was as follows:

CONVENANT ACTUAL

31 March 2011 ≤ 2.5 1.030 June 2011 ≤ 2.5 1.430 September 2011 ≤ 3.0 1.231 December 2011 ≤ 3.0 0.631 March 2012 ≤ 3.0 0.830 June 2012 ≤ 3.0 1.130 September 2012 ≤ 3.0 1.331 December 2012 ≤ 3.0 2.3

2012 2011

Net finance costs 11,967 18,904Minus: amortisation of costs of syndicated loan and convertible bond -4,285 -5,048Plus: adjustments concerning terms of covenant 8,053 3,714 Interest 15,735 17,570 Interest cover ratio (EBITDA / interest) 6.5 7.0

The adjustments resulting from the terms and conditions of the covenant in the calculation of both the interest cover ratio and the senior leverage ratio concern adjustments ensuing from the agreements made with the banks in the covenant with respect to the valuation of companies consolidated and deconsolidated in the course of the year, non-operating expenses, the unrealised valuation result on derivatives, extraordinary adjustments with

regard to defined benefit pension schemes and the impact of the application of IFRS 3R on investments in subsidiaries.

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 flows which have not been discounted.

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

CONVENANT ACTUAL

31 March 2011 ≥ 4.0 5.430 June 2011 ≥ 4.0 5.730 September 2011 ≥ 3.5 6.431 December 2011 ≥ 3.5 7.031 March 2012 ≥ 3.5 8.230 June 2012 ≥ 3.5 7.930 September 2012 ≥ 3.5 7.031 December 2012 ≥ 3.5 6.5

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

‘Start’ subordinated loan 18,390 18,390 - - - - -Syndicated loan 226,626 800 818 1,627 3,244 220,137 -Contingent consideration acquisitions 2,061 1,440 - - - 621 -Other credit facilities 2,943 55 - - 298 1,929 661Commercial paper programmes 28,941 28,941 - - - - -Bank overdrafts and borrowings 13,953 13,953 - - - - -Trade and other payables 471,477 471,477 - - - - -Financial derivatives 6,255 2,686 2,559 1,010 - - - 770,646 537,742 3,377 2,637 3,542 222,687 661

Conditions and repayment terms in 2012 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

Subordinated convertible bond 118,449 - - 118,449 - - -‘Start’ subordinated loan 30,890 12,500 - - 18,390 - -Syndicated loan 109,511 517 523 1,039 2,074 105,358 -Contingent consideration acquisitions 2,686 158 - - 525 822 1,181Other credit facilities 4,309 40 - - 970 2,579 720Bank overdrafts and borrowings 16,322 16,322 - - - - -Trade and other payables 544,462 544,462 - - - - -Financial derivatives 13,441 2,094 2,162 4,288 4,897 - - 840,070 576,093 2,685 123,776 26,856 108,759 1,901

Conditions and repayment terms in 2011 based on the nominal value including interest due

FINANCIAL STATEMENTS 095

3.2 Capital risk management Capital risk management is aimed at safeguarding the continuity of the group, making proceeds available for shareholders and commitments to other stakeholders, and maintaining an optimum capital structure in order to reduce the costs of capital. To maintain or amend the capital structure, the group can adjust the dividend, pay back capital to shareholders, issue new shares or divest assets to reduce liabilities.

The group’s objective is for the debt position to be such that the leverage ratio is equal to or below 2.0. This leverage ratio is based on a net debt position adjusted for recognised contingent considerations relating to investments in subsidiaries. The leverage ratio was 2.4 at the end of 2012 and is calculated as follows:

In connection with the targeted leverage ratio of equal to or below 2.0, working capital is monitored and an investment policy is pursued in line with the cash generation from income.

3.3 Estimating fair valueThe group implements the following hierarchy for the disclosure of financial instruments recognised at fair value: • Level1:marketpricesforfinancialinstrumentstradedonan

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 or market prices given by traders for comparable instruments.

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

Only derivative financial instruments (note 28) are carried at fair value in the balance sheet (level 2).

The principal methods and assumptions used to estimate the fair values as stated in 3.1 are summarised below:• Interest-bearing borrowings and debts: fair value is

calculated using the present value of expected future cash flows arising from repayments and interest payments.

• Lease commitments: fair value is estimated using thepresent value of expected future cash flows, discounted at the interest rate applicable to comparable lease contracts.

• Guarantee deposits: fair value of non-interest bearingguarantee deposits with no fixed maturity is equal to nil. The fair value of interest-bearing guarantee deposits with a fixed maturity is estimated using the discounted cash flow method.

• Trade receivables, trade payables, other receivables andpayables being financial instruments: for current receivables and payables with a maturity of 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 discounted cash flow method.

• Derivatives:thefairvalueofderivativesisdeterminedusingreports from the banks with whom the derivatives have been agreed. The value of derivatives is determined by the banks using Black-Scholes for i-rates.

The group discounts its financial instruments using the effective return relevant to its risk profile and the maturity of the financial instrument at the balance sheet date. The following rates are used:

The fair value is determined by discounting the relevant cash flows using the present discount rate (see above) applicable to comparable instruments.

2012 2011

Total net debt position 243,903 206,357Minus: contingent considerationacquisitions -2,061 -2,587 Net debt position for calculation ofleverage ratio 241,842 203,770 EBITDA in accordance with termsand conditions of covenant 102,197 122,759 Leverage ratio (net debt position / EBITDA) 2.4 1.7

2012 2011

Non-current receivables 4.1% 5.0%Non-current borrowings 1.5% 2.1%Subordinated loans 5.3% 5.3%


4 ESTIMATES AND JUDGEMENTS BY MANAGEMENTEstimates and judgements are constantly assessed and based on historical experience and other factors including expectations of future events which, under the circumstances, are deemed to be reasonable.

The group makes estimates and assumptions regarding future developments. An estimate is by definition rarely identical to the actual outcome. Estimates and assumptions which could lead to material adjustments in the carrying amount of assets and liabilities in the coming financial year are disclosed below.

Estimated impairment of goodwillThe group tests whether its goodwill is subject to impairment at least once a year. The recoverable value of cash-generating units is determined according to value in use, which is calculated by discounting expected future cash flows using a discount factor derived from the weighted average cost of capital. This is based on assumptions which may deviate from actual results. Sensitivity analyses with regard to the assumptions used to determine the value in use are included in note 15.

TaxesThe ultimate tax consequences of many transactions and calculations are uncertain, partly because of uncertainty concerning their timing. The group makes provisions for possible extra tax liabilities arising from tax audits. Where the actual tax sums differ from the amounts initially recognised this will have consequences for the (deferred) income tax receivables and (deferred) income tax liabilities in the period in which the differences become apparent. In addition the value of deferred income tax is based on assumptions which may differ in reality. Note 18 provides a sensitivity analysis with regard to the assumptions used.

ProvisionsProvisions are taken for future outgoing cash flows if it is not certain whether there will actually be a cash flow in the future or what the size or timing of the cash flow will be. The actual outcome may differ from the assumptions used to determine the size of the provisions and can influence the results of the periods to which the differences pertain. Further information about the sensitivity of differences and on specific provisions is provided in notes 24 and 25.

Other assets and liabilitiesThe group has agreed a number of contingent considerations with the selling parties in the context of investments in subsidiaries. The liability is dependant on financial results achieved in the future. Assumptions are made regarding these

results to determine the size of the liability. Actual results may differ from these estimates. Note 5 provides further information on the contingent considerations that have been recognised. Uncertainty also exists with regard to the group’s contingent assets and liabilities, as described in note 30.

Derivative financial instrumentsDerivative financial instruments are recognised at fair value, taking into account the future development of interest rates. Actual developments can differ from this assumption. Note 3.1.1 provides a sensitivity analysis with regard to the interest rates used.

5 ACQUISITIONS AND DIVESTMENTS OF SUBSIDIARIESThe acquisitions and divestments of subsidiaries are described below.

5.1 Acquisitions in 2012In 2012 the following acquisitions in subsidiaries took place:

The operations of the acquired companies relate to flexible labour and employment placement and outsourcing. Control Finance B.V. is focused on the flexible staffing of highly-qualified professionals in the fields of accounting, financial management and controlling. Mobiliteit Holding B.V. is focused on chauffeur services provided by students. Both investments complement the activities of the group in Specialist Staffing and Professionals.

Control Finance B.V. (the Netherlands) 100% 2 April 2012Mobiliteit Holding B.V. (the Netherlands) 100% 2 May 2012

DATE OF ACQUISITIONSUBSIDIARY

ACQUIRED % OF SHARES

097

The intial valuation of the assets and liabilities from acquisitions as at the date of acquisition was as follows:

The goodwill is predominantly attributable to expected synergies, the staff present and the complementary nature of the group’s activities in the respective markets. The goodwill paid is not deductible for tax purposes. Trade and other receivables mainly consists of trade receivables and were deemed fully recoverable as from the date of acquisition.

The reconciliation of the outflow of cash and cash equivalents in the statement of cash flows is as follows:

Contingent considerations are considered to be financial debt and are recognised as borrowings in the balance sheet. The amount of this deferred consideration, depending on the future results of the acquisition, will be at least zero and not more than € 750.

In 2012 the contribution of the acquired subsidiaries to group net revenue was € 13,409 and the contribution to group net income

was € 754. If the acquisitions had taken place as at 1 January 2012, then the contribution to net revenue would have been € 18,982 and the contribution to net income would have been € 985.

The transaction fees for the acquisitions amount to € 149 and were recognised in the income statement under general and administrative expenses.

FAIR VALUE

Customer relationships 5,398Trademarks 447Tangible and intangible fixed assets 242Trade and other receivables 3,149Cash and cash equivalents 506Other provisions -546Deferred income tax liabilities -1,252Tax liabilities -85Trade and other payables -2,538

Acquired assets and liabilities 5,321 Goodwill 10,856

Considerations transferred 16,177

Considerations transferred 16,177Minus: contingent consideration -700 Considerations transferred paid 15,477Minus: cash and cash equivalents in acquired subsidiaries -506 OUTFLOW OF CASH AND CASH EQUIVALENTS AS A RESULT OF ACQUISITIONS 14,971


5.2 Acquisitions in 2011In 2011 the following acquisitions in subsidiaries took place:

The operations of the acquired companies relate to flexible labour and employment placement and outsourcing. The reason for the acquisitions in the respective subsidiaries is to increase the group’s presence in the respective countries and the companies’ good match with the existing operations.

The acquisition in Vakcollege Groep B.V. represents an expansion of the percentage of shares owned from 20% to 80%. The remaining 20% of the shares will be supplied not later than the end of 2016. The agreed contingent consideration relates to the delivery of both 60% of the shares in 2011 and 20% of the shares

not later than 2016. The risks and rights to economic benefits will therefore belong entirely to the group and no minority interest will be taken. The 20% in Vakcollege Groep B.V. which was already owned by the group is adjusted for its fair value (€ 1,262). This resulted in a positive result of € 1,258, which is recognised in finance income in the income statement. The valuation of the acquisition of Vakcollege Groep B.V. was completed in the course of the year 2011.

The initial valuation of assets and liabilities from acquisitions as at the date of acquisition was as follows:

The goodwill is predominantly attributable to expected synergies, the staff present and the complementary nature of the group’s activities in the respective countries markets.

The goodwill paid is not deductible for tax purposes. Trade and other receivables mainly consists of trade receivables and were deemed fully recoverable as from the date of acquisition.

DATE OFSUBSIDIARY ACQUIRED % OF SHARES ACQUISITION Vakcollege Groep B.V. (the Netherlands) 60% 3 January 2011Intra-Personal GmbH (Switzerland) 100% 3 January 2011Uniman S.A. (Switzerland) 100% 17 February 2011M3 Merchandising S.L. (Spain) 100% 13 May 2011

FAIR VALUE

Customer relationships 3,278Tangible and intangible fixed assets 379Trade and other receivables 2,111Cash and cash equivalents 1,830Deferred income tax liabilities -1,019Non-current debt -83Tax liabilities -127Trade and other payables -2,837 Acquired assets and liabilities 3,532 Goodwill 10,547 Considerations transferred 14,079

099

The reconciliation of the outflow of cash and cash equivalents in the statement of cash flows is as follows:

The assets and liabilities connected with the divestment are as follows:

The result of the disposal of the subsidiary is recognised as the net result from discontinued opperations in the income statement.

Contingent considerations are recognised as borrowings in the balance sheet. The amount of contingent considerations relating to acquisitions made in 2011 was € 1,411 as at 31 December 2012 compared to € 2,587 on 31 December 2011. In 2012 an amount of € 1,283 was recognised as finance income in the income statement as a result of accrued interest on liabilities and the change of estimates made about considerations owed. The amount of contingent considerations, depending on the future results of the acquisitions, will be at least zero and not more than € 14,755.

5.3 Divestments in 2012In December 2012 the group divested its subsidiary Inter Re. The financial details of this subsidiary have been included in the income statement for the period for which the group had control of the subsidiary.

The reconcilation of the amount of the outflow of cash and cash equivalents in the statement of cash flows is as follows:

Considerations transferred 14,079Minus: fair value of associate -1,262Minus: contingent considerations -2,365 Considerations transferred paid 10,452Minus: cash and cash equivalents in acquired subsidiaries -1,830 OUTFLOW OF CASH AND CASH EQUIVALENTS AS A RESULT OF ACQUISITIONS 8,622

2012

Inflow of cash and cash equivalents as a result of divested subsidiary 29,940Cash and cash equivalents in divested subsidiary -33,468 DIVESTMENT OF SUBSIDIARY IN STATEMENT OF CASH FLOWS -3,528

2012

Cash and cash equivalents 33,468Deferred income tax liabilities -9,147Trade and other payables -1 Divested assets and liabilities 24,320 Minus: consideration received 29,940 RESULT ON DISCONTINUED OPERATIONS 5,620


6 OPERATING SEGMENTS With effect from 1 January 2012 the group adjusted its organisational structure following the strategic revision. The organisation is structured according to the product-market combinations within which the group operates. Up to the end of 2011 the organisation was governed by country. As a result the monthly information reported to the Executive Board, as chief operating decision maker, changed. Group results are divided into the divisions (General Staffing, Specialist Staffing and Professionals) and are then subsequently further analysed by country. The Executive Board bases its decisions on this information.

As a result the note on the operating segments has changed compared to the financial statements for 2011. The comparative figures for the 2011 financial year have also been adapted.

The Executive Board evaluates the segments mainly on their revenue and EBITA. Finance results are not attributed to the segments due to the fact that cash resources are managed by the central Treasury department. The breakdown of the finance results and net income are therefore not provided. A number of operating segments have been incorporated in ‘other’ due to their size.

The Netherlands 533,915 -3,940 19,926 -51 19,875Belgium / Luxembourg 361,557 -2,689 13,900 -5,716 8,184France 473,451 -1,436 4,566 -62,278 -57,712Other 305,522 -3,866 -903 -9,297 -10,200 General Staffing 1,674,445 -11,931 37,489 -77,342 -39,853 The Netherlands 397,008 -5,084 9,794 -6,385 3,409Belgium / Luxembourg 208,079 -1,547 24,292 -545 23,747Germany 238,539 -958 -748 -103,916 -104,664Other 129,253 -1,024 1,020 -37,468 -36,448 Specialist Staffing 972,879 -8,613 34,358 -148,314 -113,956 The Netherlands 163,407 -1,698 12,790 -3,163 9,627Belgium / Luxembourg 59,614 -420 4,051 -994 3,057Other 5,859 -31 -810 -287 -1,097 Professionals 228,880 -2,149 16,031 -4,444 11,587 Corporate - -808 -22,303 - -22,303 TOTAL 2,876,204 -23,501 65,575 -230,100 -164,525

OPERATINGINCOME

AMORTISATION AND

IMPAIRMENTEBITADEPRECIATIONREVENUE2012

6.1 Segmentation of income

101

The Netherlands 599,328 -4,937 13,256 -51 13,205Belgium / Luxembourg 404,309 -3,224 12,920 -1,061 11,859France 545,186 -1,653 10,064 - 10,064Other 332,150 -6,892 -4,350 -15,941 -20,291 General Staffing 1,880,973 -16,706 31,890 -17,053 14,837 The Netherlands 445,643 -6,650 1,206 -4,866 -3,660Belgium / Luxembourg 228,293 -1,866 28,543 -545 27,998Germany 301,396 -1,162 -17,099 -8,664 -25,763Other 150,968 -1,426 -318 -2,060 -2,378 Specialist Staffing 1,126,300 -11,104 12,332 -16,135 -3,803 The Netherlands 167,445 -1,989 9,687 -1,793 7,894Belgium / Luxembourg 62,023 -471 5,138 -928 4,210Other 8,031 -52 -33 -287 -320 Professionals 237,499 -2,512 14,792 -3,008 11,784 Corporate - -1,287 -27,204 - -27,204 TOTAL 3,244,772 -31,609 31,810 -36,196 -4,386

OPERATING INCOME

AMORTISATION AND

IMPAIRMENTEBITADEPRECIATIONREVENUE2011

The various types of services distinguished, as described in the accounting policies in note 2.23, are provided in every segment.

No clients have a material share of revenue.The reconciliation of results per operating segment to net income is as follows:

2012 2011

Operating income -164,525 -4,386Finance costs and finance income -11,967 -18,904Taxes -20,879 -16,783 NET INCOME FROM CONTINUING OPERATIONS -197,371 -40,073


6.2 Segmentation of balance sheet

The Netherlands 4,931 48,405 15,422 -28,054 40,704Belgium / Luxembourg 2,139 138,701 5,534 -18,192 128,182France 2,254 - 718 -39,321 -36,349Other 628 6,143 443 30,432 37,646 General Staffing 9,952 193,249 22,117 -55,135 170,183 The Netherlands 7,667 274,431 16,770 -18,526 280,342Belgium / Luxembourg 1,078 36,717 3,436 -11,737 29,494Germany 2,380 96,983 12,321 540 112,224Other 1,571 1,303 1,667 6,036 10,577 Specialist Staffing 12,696 409,434 34,194 -23,687 432,637 The Netherlands 2,170 104,822 10,585 3,080 120,657Belgium / Luxembourg 221 11,389 1,634 -498 12,746Other 96 1,056 671 -134 1,689 Professionals 2,487 117,267 12,890 2,448 135,092 Corporate 1,734 - 782 -6,225 -3,709 TOTAL 26,869 719,950 69,983 -82,599 734,203

TOTALNET WORKING

CAPITALINTANGIBLE

ASSETSGOODWILLPROPERTY, PLANT

AND EQUIPMENT31 DECEMBER 2012

The Netherlands 6,808 48,405 13,971 -14,741 54,443Belgium / Luxembourg 2,421 143,356 6,682 -21,476 130,983France 2,588 62,278 496 -47,086 18,276Other 1,927 13,632 3,400 27,625 46,584 General Staffing 13,744 267,671 24,549 -55,678 250,286 The Netherlands 10,111 275,125 18,422 -22,576 281,082Belgium / Luxembourg 1,441 36,717 3,869 -13,423 28,604Germany 3,113 194,145 19,127 -2,050 214,335Other 1,838 38,567 1,989 7,926 50,320 Specialist Staffing 16,503 544,554 43,407 -30,123 574,341 The Netherlands 2,266 95,758 9,174 2,693 109,891Belgium / Luxembourg 307 11,389 2,543 615 14,854Other 111 1,056 959 145 2,271 Professionals 2,684 108,203 12,676 3,453 127,016 Corporate 718 - 952 -8,502 -6,832 TOTAL 33,649 920,428 81,584 -90,850 944,811

TOTALNET WORKING

CAPITALINTANGIBLE

ASSETSGOODWILLPROPERTY, PLANT

AND EQUIPMENT31 DECEMBER 2011

103

2012 2011

Property, plant and equipment 26,869 33,649Goodwill 719,950 920,428Intangible assets 69,983 81,584Trade and other receivables 398,750 465,782Trade and other payables -481,349 -556,632 TOTAL 734,203 944,811

2012 2011

Wage and salary costs 1,752,455 1,984,244Social security contributions 420,948 468,963Premiums for defined contribution pension schemes 19,950 17,084Costs of defined benefit pension schemes 637 854Other costs 85,608 93,427 2,279,598 2,564,572

2012 2011

Employee costs 373,264 432,865Depreciation, amortisation and impairment 253,601 67,805Other expenses 134,178 183,918 761,043 684,588 Recognised in the income statement as: Selling expenses 422,723 526,488Amortisation and impairment of acquisition-related intangible assets 230,100 36,196General and administrative expenses 108,220 121,904 761,043 684,588

The reconciliation of assets per operating segment to the balance sheet is as follows:

7 COST OF SALESThe breakdown of the cost of sales is as follows:

8 SELLING, GENERAL AND ADMINISTRATIVE EXPENSESThe breakdown of the selling, general and administrative expenses is as follows:


2012 2011

Wages and salaries of indirect employees 255,500 304,393Social security contributions 56,039 58,441Premiums for defined contribution pension schemes 5,932 6,027Costs of defined benefit pension schemes 2,794 2,603Costs of share-based payments 764 140Other employee expenses 52,235 61,261 373,264 432,865

The breakdown of employee costs is as follows:

2012 2011

Amortisation of trademarks, customer relationships and candidate databases 17,675 19,279Impairment of trademarks, customer relationships and candidate databases 1,542 1,252Impairment of goodwill 210,883 15,665 230,100 36,196

The breakdown of amortisation and impairment of acquisition-related intangible assets is as follows:

2012 2011

Number as at 31 december 6,047 6,692Average throughout the financial year 6,175 7,003

The number of indirect employees (FTE) amounts to:

9 SHARE-BASED PAYMENTSThe item wages and salaries includes an amount of € 764 (2011: € 140) in costs relating to the granting of shares to key management and other employees. Hereof € 606 (2011: € 1,056) was directly recognised in equity. The provisions include an amount of € 680 (2011: € 522) relating to share-based payments settled in cash and cash equivalents.

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 took place in May 2011. Additionally, 25% more

shares will be granted in May 2014, provided the participant has retained the shares obtained until the date of the General Meeting of Shareholders in 2014 and the participant is still in the employment of the group. The wage tax of the members of the Executive Board is payable by the group, which is recognised as a transaction settled in cash. The fair value is determined using the Black-Scholes model, with expected volatility being based on historic volatility over a period equal to the remaining term of the share plan and the risk-free interest rate being based on the zero coupon interest rate on government bonds applying to the remaining term of the share plan.

105

The movements and the parameters were as follows:

Number of participants 5 40

Balance as at 1 January 15,541 9,697

Expired during the year - -2,014

Balance as at 31 December 15,541 7,683

Fair value € 7.52 - € 10.08 € 5.81 € 4.99 - € 10.08

Average share price for the determination of fair value € 11.18 - € 13.37 € 6.04 € 7.23 - € 12.07

Dividend yield 5% - 9% 3% 5% - 9%

Volatility 41% - 50% 49% 41% - 50%

Risk-free interest rate 1.4% - 4.2% 0,0% 1.4% - 4.6%

SETTLED IN SHARES

SETTLED IN CASH

SETTLED IN SHARES

2012KEY-MANAGEMENT

2014OTHER

2014

The intrinsic value at the date the shares were unconditionally granted was € 12.32. In determining fair value while taking into account a grossing up of the settlement due to the wage tax to be paid by USG People, the intrinsic value of share-based payments settled in cash is equal to the share price. The reclassification

of the number of conditionally granted shares between key management and other relates to the change in the composition of the Executive Board and therefore also key management during 2011.


Balance as at 1 January 76,810 19,203 85,737 21,434

Reclassification - 339 - -339

Expired during the year - -4,001 -5,961 -11,398

Unconditionally granted -76,810 - -79,776 -

Balance as at 31 December - 15,541 - 9,697

Fair value € 7.52 - € 10.08 € 5.76 € 4.99 - € 10.08

Average share price for the determination

of fair value € 11.18 - € 13.37 € 6.41 € 7.23 - € 12.07

Dividend yield 5% - 9% 5% 5% - 9%

Volatility 41% - 50% 42% 41% - 50%

Risk-free interest rate 1.4% - 4.2% 0.5% 1.4% - 4.6%

SETTLED IN SHARESSETTLED

IN CASHSETTLED

IN CASHSETTLED

IN SHARESSETTLED

IN SHARES

2011OTHER

2014OTHER

201120142011

In 2011 the movements and the parameters were as follows:

KEY-MANAGEMENT KEY-MANAGEMENT

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 May 2015, 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 of unconditional granting, the performance criteria are based on the extent to which targets relating to financial results are met. Based on the financial results 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 number of shares being granted conditionally. For 2012 the matrix indicated underlying EBITA as a percentage of the gross margin (conversion ratio) of between 13.4% and 23.6% and underlying EBITA as a percentage of revenue of between 2.8% and 5.2%. For 2011 the matrix indicated a revenue range from € 3.3 billion to € 3.9 billion and an underlying EBITA margin of 3.4% to 5.2%. Additional non-financial performance targets were agreed for key management which could result in a maximum of 30.0% of the norm number of shares being granted conditionally in each performance year. As a result the maximum factor applicable to key management is 170.0% of the norm number of shares.

In determining the costs of this share plan the 2012 performance criteria take into account a factor of 28.0% (2011: 0.0%) for the

financial performance criteria and a range of 27.3% to 28.5% for the non-financial performance criteria (2011: 30.0%) for key management. A factor of 28.0% (2011: 0.0%) is taken into account for other personnel based on the financial criteria. A factor of 100.0% has been taken into account for the period from 2013 up to and including 2014 for both key management and other personnel. The wage tax of key management is payable by the group, which will be recognised as a transaction settled in cash. The gross value of the shares conditionally granted each year is set at a maximum of the fixed remuneration for both key management and other personnel. The average share price in the course of the respective performance year applies in the calculation of this gross value.

In 2012 another 2,500 shares were conditionally granted to key management and 18,250 shares 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 method bases 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 the zero coupon on government bonds applying to a period equal to the remaining term of the share plan.

The movements and parameters were as follows:



Balance as at 1 January 375,250 324,450

Conditionally granted 12,750 70,980

Expired during the year -82,872 -140,924


Fair value € 4.36 - € 9.50 € 5.25 - € 5.26 € 4.37 - € 10.62


Dividend yield 3% - 7% 5% 3% - 6%

Volatility 47% - 52% 43% 44% - 49%

Risk-free interest rate 0.8% - 2.3% 0.0% 0.2% - 2.2%

SETTLED IN SHARES

SETTLED IN CASH

SETTLED IN SHARES

2012 KEY-MANAGEMENT OTHER

107

The number of shares stated in the table is based on performance factors achieved in 2011 and 2012 and the maximum performance factors for the period from 2013 to 2014. The expiry of conditionally granted shares for key management relates to an adjustment of the performance factor for 2012 from 170.0% to an average 55.7%. For other employees this relates to

an adjustment in the performance factor from 140.0% to 28.0%. In determining fair value while taking into account a grossing up of the settlement due to the wage tax to be paid by USG People, the intrinsic value of share-based payments settled in cash is equal to the share price.

The number of shares stated in the table is based on performance factors achieved in 2011 and the maximum performance factors for the period from 2012 to 2014. The expiry of conditionally granted shares relates to both the termination of employment and the adjustment of the performance factor for 2011 from 170.0% to 30.0% for key management and from 140.0% to 0.0% for other personnel. In determining fair value while taking into account a grossing up of the settlement due to the wage tax to be paid by USG People, the intrinsic value of share-based payments settled in cash is equal to the share price. The reclassification of the number of conditionally granted shares between key management and other relates to the change in the composition of the Executive Board and therefore also key management in 2011.

Additional share planIn 2012 an additional share plan was launched for a number of employees at a newly acquired operating company. The number of shares conditionally granted is 30,000. The unconditional granting of half of the shares will take place in May 2013, with the other half of the shares being unconditionally granted in May 2014. In addition to the participant still being in the employment of the group at the time of unconditional granting, the performance criteria are based on the extent to which EBITDA targets for 2012 and 2013 are met by the respective operating company.

The fair value is determined using the Black-Scholes model, with expected volatility being based on historic volatility over a period equal to the remaining term of the share plan and the risk-free interest rate being based on the zero coupon interest rate on government bonds applying to the remaining term of the share plan.


Balance as at 1 January - -

Conditionally granted 562,417 468,972

Reclassification 3,208 -3,208

Expired during the year -190,375 -141,314


Fair value € 4.36 - € 9.50 € 5.25 - € 5.34 € 8.99 - € 10.62


Dividend yield 3% - 7% 5% 3% - 4%

Volatility 49% - 52% 51% 49%

Risk-free interest rate 1.2% - 2.3% 1.0% 2.2%

SETTLED IN SHARES

SETTLED IN CASH

SETTLED IN SHARES

2011 KEY-MANAGEMENT OTHER


USG People SAR plan 2008-2010The USG People SAR plan covers the period from April 2008 up to April 2014. The only performance criterion for unconditional settlement after three years is that the participant is still employed by the group at the time of settlement. The USG People 2008-2010 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 April 2008 (€ 14.83), April 2009 (€ 6.73) and April 2010 (€ 13.95), respectively, and the share price at the moment of unconditional settlement. Settlement after three years will be postponed by six months 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, settlement will 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 first unconditional settlement could have taken place in the spring of 2011 (being three years after having been granted

in 2008), but the distributable amount was less than € 1 and settlement was therefore postponed in accordance with the terms and conditions until April 2012. On this date the share price was still insufficient and the rights granted expired.The second unconditional settlement could have taken place in the spring of 2012 (being three years after having been granted in 2009), but the distributable amount was less than € 1 and settlement was therefore postponed in accordance with the terms and conditions until April 2013.

The fair value has been determined based on a Monte Carlo model, which provides a simulation of the market condition applied to the SAR plan. The method bases expected volatility on the historic volatility for a period equal to the remaining term of the SAR and the risk-free interest is based on the zero coupon on government bonds applying to a period equal to the remaining term of the SAR.

SETTLED IN SHARES

2012 2013 2014

Number of participants 6 6Balance as at 1 January - -Conditionally granted 15,000 15,000Expired during the year -15,000 -Balance as at 31 December - 15,000

Fair value € 6.43 € 6.04Average share price for the determination of fair value € 6.58 € 6.58Dividend yield 3% 5%Volatility 57% 44%Risk-free interest rate 0.1% 0.3%

The movements and the parameters were as follows:

109

GRANTED IN 2008, EXPIRING IN 2011 2012 2011

Number of participants - 301

Exercise share price € 14.83 € 14.83 Outstanding at 1 January 111,917 133,887Expired -111,917 -21,970 Outstanding at end of financial year - 111,917 Parameters: Fair value at end of financial year € 0.01 Intrinsic value € 0.00Share price used to determine fair value € 6.41Risk-free interest rate 0.0%Volatility 64%Dividend yield 0%



Exercise share price € 6.73 € 6.73 Outstanding at 1 January 129,660 155,408Expired -30,535 -25,748 Outstanding at end of financial year 99,125 129,660 Parameters: Fair value at end of financial year € 0.06 € 0.95Intrinsic value € 0.00 € 0.00Share price used to determine fair value € 6.04 € 6.41Risk-free interest rate 0.0% 0.2%Volatility 27% 44%Dividend yield 2% 3%

The movements were as follows:



Exercise share price €13.95 €13.95 Outstanding at 1 January 152,199 180,838Expired -34,631 -28,639 Outstanding at end of financial year 117,568 152,199 Parameters: Fair value at end of financial year € 0.12 € 0.20Intrinsic value € 0.00 € 0.00Share price used to determine fair value € 6.04 € 6.41Risk-free interest rate 0.0% 0.5%Volatility 49% 42%Dividend yield 3% 5%



Exercise share price €12.32 €12.32 Outstanding at 1 January 182,660 -Conditionally granted - 204,830Expired -34,740 -22,170 Outstanding at end of financial year 147,920 182,660 Parameters: Fair value at end of financial year € 0.27 € 0.79Intrinsic value € 0.00 € 0.00Share price used to determine fair value € 6.04 € 6.41Risk-free interest rate 0.0% 1.0%Volatility 43% 51%Dividend yield 4% 5%

USG People SAR plan 2011-2014The USG People SAR plan 2011–2014 came into effect in 2011. The terms and conditions and valuation of this plan are identical to those of the SAR plan 2008–2010. The settlement in cash will be the difference between the share price in May 2011 (€ 12.32)

and May 2012 (€ 6.58), respectively, and the share price at the moment of unconditional settlement.

The movements were as follows:


GRANTED IN 2012, EXPIRING IN 2015 2012

Number of participants 435

Exercise share price € 6.58 Outstanding at 1 January -Conditionally granted 190,430Expired -9,860 Outstanding at end of financial year 180,570 Parameters: Fair value at end of financial year € 1.21Intrinsic value € 0.00Share price used to determine fair value € 6.04Risk-free interest rate 0.2%Volatility 43%Dividend yield 5%

The salary component of the contingent consideration concerns a conditional payment relating to an acquisition in a subsidiary. This component was not recognised as part of the consideration

transferred due to the fact that the consideration depends on the continuation of employment.

The unrealised value adjustment on derivatives is recognised as finance income. Information on the determination of finance costs can be found in note 23.

Other interest expenses relates to interest on bank overdrafts.

2012 2011

Salary component of contingent consideration -105 -80Result on associates 17 82 -88 2

10 OTHER INCOME AND EXPENSES

2012 2011

Interest on borrowings 9,898 13,250Realised result on financial derivatives 9,221 7,669Commitment fee on syndicated loan 1,663 1,924Other interest expenses 1,837 3,302Currency translation differences 53 -Capitalised interest on software development - -55 22,672 26,090

11 FINANCE COSTS

The unrealised result on financial derivatives relates to the revaluation of interest rate derivatives. Valuation details can be found in note 28.

The revaluation of the loan to the French government relates to changes in the market interest rate at which the cash flows from this loan are discounted. The interest received on this loan is lower than the market interest rate. In 2011 the revaluation

concerned a charge of € 242 (under other interest expenses).The valuation changes to contingent considerations relating to acquisitions is the result of a reconsideration of the earn-outs which are to be paid for former investments in subsidiaries.

The revaluation of associate in 2011 concerns the expansion of the stake in Vakcollege Groep B.V. from 20% to 80%. See note 5.

2012 2011

Interest received 1,415 1,294Unrealised result on financial derivatives 6,943 4,625Revaluation of French government loan 928 -Valuation changes to contingent considerations 1,419 -Revaluation of associate - 1,258Currency translation differences - 9 10,705 7,186

2012 2011

Current taxes 23,213 27,521Deferred taxes -2,334 -10,738 CHARGE IN FINANCIAL STATEMENT 20,879 16,783

12 FINANCE INCOME

13 INCOME TAX EXPENSE


Taxation on group profit before taxes differs as follows from the charge as calculated using the weighted average standard tax rate for consolidated entities:

2012 2012 % 2011 2011 %

Result before taxes -176,492 -23,290 Taxation based on weighted average tax rate -46,758 26.5% -1,748 7.5%Non tax-deductible costs 4,459 -2.5% 6,807 -29.2%Tax-deductible tax on added value -2,388 1.4% -2,722 11.7%Non tax-deductible goodwill impairment 62,064 -35.2% 4,700 -20.2%Change in unrecognised losses 3,021 -1.7% 7,450 -32.0%Reassessed income tax charge from previous years 1,431 -0.8% 2,128 -9.2%Tax-exempt revenue -8,306 4.7% -7,478 32.1%Change in tax rates - - -72 0.3%Tax on added value 7,356 -4.2% 7,718 -33.1% CHARGE/(BENEFIT) IN FINANCIAL STATEMENT 20,879 -11.8% 16,783 -72.1%

The weighted average nominal tax rate was 26.5% (2011: 7.5%). The change in the nominal tax rate compared to the previous year was due to a change in the composition of the results of subsidiaries in the various countries.

Amounts relating mainly to deferred income tax assets in Spain (€ 974) and Switzerland (of € 1,802) based on an adjusted estimate of recognisable losses have been included in the change in unrecognised losses (2011: loss of € 9,428 in Spain).

In France a tax is levied on the added value which is recognised as income tax expense. For tax purposes this amount is deductible and it is recognised in the above table as tax-deductible tax on added value. Tax-exempt revenue mainly relates to the notional interest deduction in Belgium.


BREAKDOWN OF CARRYING AMOUNT AS AT 1 JANUARY 2011 Cost 928 100,279 28,068 56,802 186,077Cumulative depreciation and impairments -102 -75,948 -22,609 -42,902 -141,561

Carrying amount as at 1 January 2011 826 24,331 5,459 13,900 44,516 CHANGES IN CARRYING AMOUNT Acquisition of subsidiaries - - 106 231 337Investments - 3,976 2,490 1,277 7,743Disposals - -498 -101 -391 -990Depreciation -30 -9,288 -3,171 -4,445 -16,934Impairments - -528 -254 -223 -1,005Currency translation differences - 1 -9 -10 -18 Balance -30 -6,337 -939 -3,561 -10,867 BREAKDOWN OF CARRYING AMOUNT AS AT 31 DECEMBER 2011 Cost 928 84,752 29,892 48,570 164,142Cumulative depreciation and impairments -132 -66,758 -25,372 -38,231 -130,493 Carrying amount as at 31 December 2011 796 17,994 4,520 10,339 33,649 CHANGES IN CARRYING AMOUNT Acquisition of subsidiaries - 13 43 145 201Investments - 2,994 2,403 1,040 6,437Disposals - -591 -62 -461 -1,114Depreciation -30 -5,759 -2,270 -3,213 -11,272Impairments - -562 -259 -228 -1,049Currency translation differences - 1 8 8 17 Balance -30 -3,904 -137 -2,709 -6,780 BREAKDOWN OF CARRYING AMOUNT AS AT 31 DECEMBER 2012 Cost 804 76,499 22,345 42,742 142,390Cumulative depreciation and impairments -38 -62,409 -17,962 -35,112 -115,521 CARRYING AMOUNT AS AT 31 DECEMBER 2012 766 14,090 4,383 7,630 26,869

TOTALOTHER

FIXED ASSETS

COMPUTERS AND

PERIPHERALS

FURNISHINGS AND

ACONVERSIONSBUILDINGS AND LAND

14 PROPERTY, PLANT AND EQUIPMENT

An amount of € 2,925 (2011: € 4,368) arising from the depreciation of property, plant and equipment has been included in the general and administrative expenses. Lease expenses totaling € 57,915 (2011: € 70,668) relating to cars and property leases are included in the income statement. No assets were financed by

financial lease. Impairments in 2012 of € 1,049 (2011: € 1,005) relate to the downward value adjustment of assets in Spain based on impairment testing. Reference is made to note 15 for more information on the impairment test.

115

The acquisition of subsidiaries is specified in more detail in note 5. The adjustment of the liability from acquisition of subsidiary in 2012 relates to an adjustment of an earn-out obligation. The respective acquisition took place prior to 2009, for which the adjustment of the additional liability was recognised in accordance with IFRS 3, which applied at the time. The increase resulting from the additional liability from acquisition of subsidiary in 2011 relates to the recognition of an additional payment to be made to the former shareholders of Allgeier DL in Germany in connection with the buyout of minority stakes (see note 25). This additional payment concerns the acquisition of Allgeier DL in 2008 and has been recognised as a value adjustment to a contingent consideration in goodwill.

Goodwill is allocated to groups of cash-generating units. This allocation is based on the segment-focused reporting structure used by the Executive Board to monitor goodwill in 2012 (see table opposite).

In 2012 impairment testing revealed a value reduction which led to a goodwill impairment of € 210,883 (2011: € 15,665 in the cash-generating unit General Staffing Spain). As a result of the persistently low level of economic growth in Europe in the fourth quarter of 2012, General Staffing revenue in the southern European countries is contracting and profitability is not recovering in line with expectations. In addition the expected recovery of revenue at Specialist Staffing Germany did not materialise in the fourth quarter of 2012, with profitability therefore not recovering in line with expectations.

The value reductions concern the cash-generating units General Staffing Luxembourg, General Staffing France, General Staffing Switzerland, General Staffing Poland, Specialist Staffing Germany, Specialist Staffing Italy and Specialist Staffing Switzerland.

2012 2011

General Staffing The Netherlands 48,405 48,405General Staffing Belgium 138,701 138,701General Staffing Luxembourg - 4,655General Staffing France - 62,278General Staffing Austria 6,143 6,143General Staffing Switzerland - 710General Staffing Poland - 6,779Specialist Staffing The Netherlands 274,431 275,125Specialist Staffing Belgium 36,717 36,717Specialist Staffing Germany 96,983 194,145Specialist Staffing Italy - 35,816Specialist Staffing Switzerland 1,303 2,751Professionals The Netherlands 104,822 95,758Professionals Belgium 11,389 11,389Professionals France 1,056 1,056 719,950 920,428

2012 2011

Costs 1,003,701 986,723Impairments -83,273 -67,608 Carrying amount as at 1 January 920,428 919,115 Acquisition of subsidiaries 10,856 10,547Adjustment or additional liability from acquisition of subsidiary -454 6,423Impairments -210,883 -15,665Currency translation differences 3 8 Balance -200,478 1,313 Carrying amount as at 31 December 719,950 920,428 Cost 1,014,103 1,003,701Impairments -294,153 -83,273 CARRYING AMOUNT AS AT 31 DECEMBER 719,950 920,428

15 GOODWILL


15.1 Impairment for cash-generating units where goodwill is capitalisedCash-generating units are subject to annual impairment testing. Impairment testing involves comparing the carrying amount (goodwill, property, plant and equipment, intangible assets and working capital) of the cash-generating units concerned with their recoverable value. This recoverable value is determined by calculating their economic value. These calculations are based on future cash flows discounted using a pre-tax discount factor. For the group this resulted in a pre-tax discount factor between 6.9% and 24.0% (2011: between 10.3% and 15.3%). Future cash flows are estimated based on past performance, actual income from operations, budgets for 2013, a seven-year projection and internal and external market expectations. The divergence from the maximum five-year projection required under IAS 36 reflects past experience showing that a full market cycle in this sector lasts around seven years.

The principal assumptions in determining the economic value concern estimates of revenue growth in the divisions in which the cash-generating units operate. The growth projections are based on a cyclical pattern which provides a favourable medium-term growth outlook in most countries due to a low penetration of flexible labour and a low degree of specialisation (specialist staffing). The level of penetration is expected to rise in the future as a result of amendments in European legislation and regulations with regard to temporary staffing. The growth expectations for the countries in which USG People operates are partly based on the long-term expectations for Gross Domestic Product in each country and the associated growth of the temporary staffing market. The impairment test calculations take into account average annual revenue growth in mature markets of 0% to 6% during the first three years and 2% to 7% during the following four years. In the growth markets the calculations take into account average annual revenue growth of 3% to 10% in the first three years and 4% to 10% in the following four years.

The residual value after the projected period of seven years is based on the present value of the cash flow which takes into account infinite growth equal to an expected inflation of 0.5% (2011: 1.5%).

Expected average revenue growth and discount rate of the groups of cash-generating units where a significant part of the goodwill is allocated on an annual basis are as follows:

The growth expectations of a number of cash-generating units are higher than last year based on the expectation that the temporary staffing market is currently at a low point in the cycle. Due to the current economic situation in various European countries and the impact this has on operations and the expected future results of the cash-generating units, total impairments of € 215,042 were recognised with respect to goodwill, property, plant and equipment, and other intangible assets.

A discount rate of 6.9% to 24.0% was applied, depending on the country. These costs of amortisation and depreciation are recognised as selling expenses in the income statement.

Sensitivity analyses were performed for possible scenarios which can lead to impairment, taking into account the impairment recognised. The results of the sensitivity analyses for the groups of cash-generating units to which a significant part of the goodwill is attributed reveal the following :

2012

Specialist Staffing The Netherlands 5.2% 12.0%General Staffing The Netherlands 2.7% 12.1%General Staffing Belgium 4.3% 15.8%Specialist Staffing Germany 9.2% 12.2%Professionals The Netherlands 4.6% 12.0%

ASSUMED PROJECTED AVERAGE REVENUE

GROWTH 2013-2019

PRE-TAX DISCOUNT

RATE

2011

The Netherlands Specialist Staffing 3.8% 12.0%The Netherlands other 4.7% 11.9%Belgium General Staffing 3.5% 13.8%Germany 5.6% 12.6%

ASSUMED PROJECTED AVERAGE REVENUE

GROWTH 2012-2018

PRE-TAX DISCOUNT

RATE

IMPAIRMENT 2012 2011 Goodwill 210,883 15,665Property, plant and equipment 1,049 1,005Other intangible assets 3,110 2,365 215,042 19,035

117

• A50basispointriseinthepre-taxdiscountfactorcanlowerthe amount by which the value in use exceeds the carrying value by 12% and can result in an impairment of € 6.3 million on the goodwill of Specialist Staffing Germany and € 6.2 million on the goodwill of General Staffing Belgium.

• If revenue projections for 2013 are lowered by 10% andtherefore also revenue levels for the years that follow, this could lower the amount by which the value in use exceeds the carrying value by 22% and could result in an impairment of € 11.6 million on the goodwill of Specialist Staffing Germany and € 12.5 million on the goodwill of General Staffing Belgium.

• If the projections for EBITA as a percentage of revenue arelowered by 50 basis points the amount by which the value in use exceeds the carrying value can fall by 23% and result in

an impairment of € 15.3 million on the goodwill of Specialist Staffing Germany and € 14.0 million on the goodwill of General Staffing Belgium.

Specialist Staffing Germany and General Staffing Belgium are the most sensitive cash-generating units in this respect. Last year Specialist Staffing Germany was also sensitive to deviations in business projections. The other input variables used in sensitivity analysis calculations have been kept the same as the initial projections. In reality the various input variables will influence each other, meaning that the outcome of the analysis provides merely an indication of the impact of unilateral changes.

BREAKDOWN OF CARRYING AMOUNT AS AT 1 JANUARY 2011 Cost 40,759 116,813 7,765 87,348 275 252,960Cumulative amortisation and impairments -36,884 -67,097 -5,536 -42,250 -275 -152,042 CARRYING AMOUNT AS AT 1 JANUARY 2011 3,875 49,716 2,229 45,098 - 100,918 CHANGES IN CARRYING AMOUNT Acquisition of subsidiaries - 3,278 - 42 - 3,320Investments - - - 11,705 - 11,705Disposals - - - -158 - -158Amortisation -1,030 -17,114 -1,135 -12,557 - -31,836Impairments - -157 -1,095 -1,113 - -2,365Currency translation differences - 4 1 -5 - - Balance -1,030 -13,989 -2,229 -2,086 - -19,334

BREAKDOWN OF CARRYING AMOUNT AS AT 31 DECEMBER 2011 Cost 9,863 120,006 7,765 96,712 - 234,346Cumulative amortisation and impairments -7,018 -84,279 -7,765 -53,700 - -152,762 CARRYING AMOUNT AS AT 31 DECEMBER 2011 2,845 35,727 - 43,012 - 81,584 CHANGES IN CARRYING AMOUNT Acquisition of subsidiaries 447 5,398 - 41 - 5,886Investments 3 - - 13,132 - 13,135Disposals - - - -240 - -240Amortisation -1,649 -16,026 - -9,612 - -27,287Impairments - -1,542 - -1,568 - -3,110Currency translation differences - 1 - 14 - 15 Balance -1,199 -12,169 - 1,767 - -11,601 BREAKDOWN OF CARRYING AMOUNT AS AT 31 DECEMBER 2012 Cost 10,313 125,405 7,765 105,902 - 249,385Cumulative amortisation and impairments -8,667 -101,847 -7,765 -61,123 - -179,402 CARRYING AMOUNT AS AT 31 DECEMBER 2012 1,646 23,558 - 44,779 - 69,983

TRADEMARKS

CUSTOMER RELATION-

SHIPSCANDIDATE DATABASES SOFTWARE OTHER TOTAL

16 OTHER INTANGIBLE ASSETS

An amount of € 7,440 (2011: € 8,361) arising from the amortisation of intangible assets has been included in the general and administrative expenses. The amortisation and impairment of trademarks and customer relationships of € 19,217 (2011: € 18,301) are recognised as selling costs.

Accelerated amortisation of € 683 took place in 2012 in connection with a proposed rebranding of trademarks in 2013.

Investments in software includes an amount of € 7,170 (2011: € 3,884 including € 55 for capitalised interest) related to software in development. Impairments in 2012 of € 3,110 (2011: € 2,365) relate to the downward value adjustment of assets in General Staffing Spain based on impairment testing. Reference is made to note 15 for more information on the impairment test.

The remaining useful life of the intangible assets is between one and nine years.

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 loan is € 13,597 (2011: € 11,604). The interest received on the loan is lower than the market interest rate, meaning that the carrying value is less than the nominal value. 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 loan that was concluded in 2011 (note 23). The payment period of the financial fixed assets has not expired and no provision for non-payment has been made.

Associates relates to several small interests maintained by the group.

2012 2011

Deferred income tax asset: - Deferred income tax asset for settlement after 12 months 67,113 65,417- Deferred income tax asset for settlement within 12 months 3,874 8,766 70,987 74,183Deferred income tax liability: - Deferred income tax liability for settlement after 12 months 8,611 20,651- Deferred income tax liability for settlement within 12 months 4,559 5,944 13,170 26,595 NET DEFERRED ASSET 57,817 47,588

18 DEFERRED INCOME TAX ASSET AND LIABILITY

2012 2011

Long-term loan 10,302 7,318Guarantee deposits 1,503 1,645Capitalised transaction fees relating to syndicated loan 2,540 3,007Associates 397 384 BALANCE AS AT 31 DECEMBER 14,742 12,354

17 FINANCIAL FIXED ASSETS


CHANGE IN DEFERRED INCOME TAXES 2012 2011

Balance as at 1 January 47,588 37,869To income statement 2,334 10,738Acquisition of subsidiaries -1,252 -1,019Divestment of subsidiary 9,147 - BALANCE AS AT 31 DECEMBER 57,817 47,588

DEFERRED INCOME TAX ASSET 2012 2011

Tax losses carried forward 52,778 52,624Other 18,209 21,559 BALANCE AS AT 31 DECEMBER 70,987 74,183

DEFERRED INCOME TAX LIABILITY 2012 2011

Intangible assets 10,343 14,130Subordinated convertible bond - 858Other 2,827 11,607 BALANCE AS AT 31 DECEMBER 13,170 26,595

TAXES ON UNRECOGNISED LOSSES 2012 2011

Balance as at 1 January 17,342 8,118Additional taxes on unrecognised losses 2,305 11,145Recognition of previously unrecognised losses - -1,614Permanently unrecognisable losses -445 -307 BALANCE AS AT 31 DECEMBER 19,202 17,342

The deferred income tax asset and liability consist of:

The asset connected with tax losses carried forward relates mainly to Belgium, the Netherlands, Germany, Italy and Spain. The other deferred income tax asset item includes temporary differences for tax-deductible goodwill and the valuation of derivative instruments. The deferred asset is valued at the applicable nominal tax rates.

Based on earnings prognoses for the coming years, the Executive Board has made an estimation of the probability of these assets being used in the coming years, taking into account country-specific settlement possibilities. The prognoses are in line with the assumptions used in impairment testing (note 15), supplemented with specific elements for the determination of the result for tax purposes.

The other deferred income tax liabilities item includes temporary differences relating to capitalised costs of the syndicated loan and the liability connected with a defined benefit pension scheme. The reduction in deferred income tax liabilities

compared to 2011 is the result of the divestment of subsidiary Inter Re (see note 5). Changes in non-capitalised tax losses carried forward in 2012 are as follows:

Additional taxes on unrecognised losses comprises losses that are not expected to be offset in the near future. Of these unrecognised losses, an amount of € 121 will expire in 2013 and an amount of € 5,392 has an unlimited settlement period with future taxable profits.

The measurement of deferred taxes is based on assumptions which may differ from actual tax sums. Deviations from these assumptions can lead to an increase of € 11.5 million and a reduction of € 7.7 million in deferred income tax assets.

From 2009 trade receivables were sold in Belgium and France. The risks and rewards related to the receivables were transferred to factoring companies. The group may sell up to € 150 million in trade receivables at any given time. At the end of 2012 trade receivables totalling € 99.8 million were sold (2011: € 128.4 million).

Of the trade receivables invoiced (€ 370.6 million including VAT), an amount of € 267.9 million was insured and the remaining € 102.7 million was not. Of the uninsured amount € 32.6 million

concerns trade receiveables from governments. Of the trade receivables invoiced at the end of 2011 (€ 418,2 miljoen including VAT), an amount of € 277.9 million was insured and € 140.2 million was uninsured. Of the uninsured amount € 40.4 million concerned trade receivables from governments.

In 2012 an amount of € 1.4 million (2011: € 1.3 million) was received from the insurance company as compensation for damages.

2012 2011

Trade receivables invoiced 370,626 418,150Trade receivables to be invoiced 13,611 20,449 Total trade receivables 384,237 438,599Minus: bad debt provision -9,612 -10,321 Trade receivables minus bad debt provision 374,625 428,278Other current receivables 4,813 14,299Accrued income 19,312 23,205 BALANCE AS AT 31 DECEMBER 398,750 465,782

19 TRADE AND OTHER RECEIVABLES

The age analysis on the trade receivables is as follows: 2012 2011

Payment period has not yet expired 299,075 352,116Payment period has expired: < 90 days 72,605 72,30991 – 180 days 1,161 1,781> 180 days 1,784 2,072 Total trade receivables not impaired 374,625 428,278Trade receivables impaired 9,612 10,321 Total trade receivables 384,237 438,599


Movement of the bad debt provision is as follows:

The creation of bad debt provisions and releases from such provisions are recognised as selling expenses in the income statement.

2012 2011

Balance as at 1 January 10,321 8,536Provisions made during the year 6,397 6,777Trade receivables impaired -671 -2,909Released during the year -6,429 -2,091Currency translation differences -6 8 BALANCE AS AT 31 DECEMBER 9,612 10,321

2012 2011

Cash and cash equivalents as stated on the balance sheet 35,355 55,865Bank overdrafts -13,953 -16,322 CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AS STATED IN THE CASH FLOW STATEMENT 21,402 39,543

20 CASH AND CASH EQUIVALENTS

21 CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS21.1 Share capital

An amount of € 1,027 (2010: € 2,359) is not freely available and is intended exclusively to cover wage tax payments in the Netherlands. Cash and cash equivalents are lodged exclusively

with financial institutions rated no lower than A (S&P, Moody’s, Fitch or A.M. Best).

Balance as at 1 January 2011 77,702 38,851 367,449 406,300Issuance under share plan 180 90 - 90Stock dividend 567 283 -283 - Balance as at 31 December 2011 78,449 39,224 367,166 406,390 Balans as at 1 January 2012 78,449 39,224 367,166 406,390Stock dividend 1,267 634 -634 - BALANCE AS AT 31 DECEMBER 2012 79,716 39,858 366,532 406,390

TOTALSHARE

PREMIUMPAID-UP AND

CALLED-UPNUMBER OF

SHARES (X 1,000)

2012 2011

Equity component of subordinated convertible bond - 14,716Share plan 1,622 1,016Currency translation differences -485 -855 1,137 14,877

in thousands of shares 2012 2011

Issued as at 1 January 78,449 77,702Issuance under share plan - 106Stock dividend 720 301 Weighted average number of shares during the year 79,169 78,109

21.2 Legal reservesThe following breakdown of legal reserves applies:

The authorised share capital as at 31 December 2012 and 2011 comprised 200 million shares with a nominal value of € 0.50. Holders are entitled to one vote per share at the company’s shareholders’ meetings.

On 6 June 2012 a dividend of € 0.17 per share was distributed in cash or shares. The number of dividend rights giving entitlement to two new ordinary shares with a nominal value of € 0.50 was set at 65, while 41,189,526 shares were registered for the payment of stock dividend. 1,267,370 new ordinary shares were issued for this purpose. An amount of € 6,334 was distributed in cash for the remaining shares.

180,245 new shares were issued on 30 May 2011 to cover the final granting of shares under the Unique Share Plan 2005-2007 and Unique Share Plan 2008-2010 (note 9).

On 20 June 2011 a dividend of € 0.16 per share was distributed in cash or shares. The number of dividend rights giving entitlement to one new ordinary share with a nominal value of € 0.50 was set at 75, while 42,437,471 shares were registered for the payment of stock dividend. 565,833 new ordinary shares were issued for this purpose. An amount of € 5,642 was distributed in cash for the remaining shares.

Due to the fact that the subordinated convertible bond was repaid in in 2012, the equity component amounting to € 14,716 was recognised in the free reserve.

21.3 Retained earningsThe legal reserve currency translation differences can be classified as a statutory reserve. As the reserve was negative at the end of 2012, an amount equal to the currency translation differences reserve may not be distributed from the free reserve.

22 EARNINGS PER SHAREAverage earnings per share in 2012 amounted to -€ 2.42 (2011: -€ 0.51). The calculation of average earnings per share at 31 December 2012 is based on net income available to ordinary shareholders, equalling -€ 191.834 (2011: -€ 40.159) and the weighted average number of outstanding shares in 2012, equalling 79,169 (2011: 78,109). The weighted average number of shares is calculated as follows:

Once the subordinated convertible bond was repaid there was no longer a possibility of dilution as a result of the conversion of shares. A disclosure of diluted earnings per share is therefore no longer provided.

Holders of ordinary shares are entitled to the distribution of dividends as approved by the General Meeting of Shareholders. During the General Meeting of Shareholders on 8 May 2013 a dividend for 2012 equal to € 0.12 per share (total dividend of € 9,566) will be proposed. The dividend proposal has not been recognised in these financial statements.


23 NON-CURRENT INTEREST-BEARING BORROWINGSThis note contains information on the contractual terms of the non-current interest-bearing borrowings and liabilities. For more information on the interest risk exposure, reference is made to note 28.

Conditions and repayment terms for 2012 based on carrying amount

2012 2011

Carrying amount of non-current interest-bearing borrowings and liabilities 236,364 245,900Current portion of the borrowings -19,693 -124,225 216,671 121,675

‘Start’ subordinated loan 18,241 18,241 - - -Syndicated revolving credit facility 213,679 - - 213,679 -Contingent considerations acquired subsidiaries 2,061 1,440 - 621 -Other non-current credit facilities 2,383 12 253 1,500 618

236,364 19,693 253 215,800 618

> 5 YEARS2-5 YEARS1-2 YEARS< 1 YEARTOTAL

Conditions and repayment terms for 2011 based on carrying amount

Subordinated convertible bond 111,567 111,567 - - -‘Start’ subordinated loan 29,891 12,500 17,391 - -Syndicated revolving credit facility 98,326 - - 98,326 -Contingent considerations acquired subsidiaries 2,587 158 526 802 1,101Other non-current credit facilities 3,529 - 849 2,000 680

245,900 124,225 18,766 101,128 1,781


23.1 Syndicated loanIn 2011 the group signed a € 700 million syndicated credit facility. The loan concerns a revolving and standby facility and has a term of five years (July 2016). The agreed ratio covenants include a senior leverage ratio of a maximum of 3.0 and an interest coverage ratio of at least 3.5 (see note 3.1.3). The facility also stipulates a maximum amount for acquisitions per year and over the entire term. The interest expenses on the portion of the credit facility that is taken up are calculated based on the one-month to six-month EURIBOR rate increased by an interest margin of between 95 and 165 basis points.

The syndicated loan originally consists of three tranches, namely A, B and C. As a result of the repayment of the subordinated convertible bond in October 2012, tranche A was automatically increased by the amount of tranche C:

• TrancheA(€600million):revolvingcreditfacility(€350million)of which € 215 million was taken up at the end of 2012 and ancillary credit facilities (€ 250 million), available in the form of short-term credits and bank guarantees from the syndicate of banks;


• Tranche B (€ 100 million): revolving credit facility and/orbackstop facility reserved for a commercial paper programme of which an amount of € 29 million had been allocated as a backstop to cover commercial paper issued.

The bank and consultation fees paid when concluding the syndicated credit facility (€ 5,061) have been recognised based on the use of the facility at the moment of withdrawal on 7 July 2011, of which:

• anamountof€1,836 isattributedtothe loantakenup,andamortisation is calculated using the effective interest method. The effective interest rate of 2.6% applies to the liability component. The costs are deducted from the liability shown on the balance sheet;

• anamountof€1,048isattributedtothatpartofthefacilityavailable for future repayment of the subordinated convertible bond and the ‘Start’ subordinated loan. These expenses are recognised as financial assets and depreciation expenses are charged to the income statement from the time the facility is used for the aforementioned repayments;

• anamountof€2,176isattributedtotheremainingavailablepart of the facility. These expenses are also recognised as financial assets and charged to the income statement using the straight-line method during the term of the facility (five years).

Movements in the syndicated loan are as follows:

2012 2011

Carrying value of tranche A as at 1 January 98,326 -Withdrawn 114,999 154,000Recognised transaction fees - -1,836Interest expenses 2,039 1,527Interest paid -1,685 -1,365Repaid - -54,000 Carrying amount of tranche A as at 31 December 213,679 98,326

2012 2011

Carrying amount as at 1 January 111,567 107,492Interest expenses 6,882 7,525Interest paid -3,450 -3,450Repayment -114,999 - Carrying value as at 31 December - 111,567

Interest expenses and commitment feeThe average interest rate in 2012 was 1.4% (2011: 2.7%). The commitment fee amounted to € 1,663 in 2012 (2011: € 1,924) and is charged as finance costs in the income statement.

23.2 Subordinated convertible bond

The subordinated convertible bond was repaid in October 2012. No bonds were offered for conversion into shares. The coupon rate equalled 3.0%. Interest expenses on the subordinated

convertible bond are calculated using the effective interest method, whereby an effective interest rate of 7.0% applies to the liability component.

125

23.3 Other credit facilities‘Start’ subordinated loanIn March 2003 a subordinated loan of € 100 million was agreed with the former shareholder of Start Holding B.V. (a subsidiary of USG People N.V.). The loan is repaid in instalments and it was agreed that interest payments would be deferred and added to the principal. In 2012 a sum of € 12.5 million was repaid on this loan. The final instalment is € 18.4 million (including deferred interest) in March 2013. This term loan has a fixed interest rate of 4.0% and a rate of 4.5% - 5.5% on the deferred interest payments.

24 PENSION-RELATED ASSETS AND LIABILITIESThe group contributes to a number of defined benefit pension schemes which provide for pensions for employees when they reach retirement age. These schemes apply to part of the workforce in the Netherlands, Switzerland and Germany. The other countries where the group operates have defined contribution schemes and/or retirement provisions that comply with the national regulations and customs in those countries. The determination of annual costs for the year takes into account the nature of the scheme, which provides for indexation of pension entitlements insofar as the separate pension trusts’ investment proceeds exceed the actuarially required interest and insofar as surplus interest is available.

The pension asset of € 5,127 (2011: € 5,503), which have been recognised under other fixed assets, relates to the pension schemes in the Netherlands (including that of Start People), Switzerland and Germany. The liability in Switzerland and Germany amounts to € 1,321 (2011: € 1,229).

Unrealised actuarial gains and losses pertaining to the pension scheme of Start People the Netherlands amount to less than 10% of the present value of funded obligations or, if higher, 10% of the

fair value of the fund investments. In 2012 and 2011 virtually no amortisation was recognised in the income statement. IAS 19R will be applied with effect from 2013. The corridor arrangement will cease to exist, resulting in a € 10.2 million reduction in equity, due to the deduction of unrealised actuarial losses. Administration costs are recognised in the income statement, administrative costs in comprehensive income. If this change had been applied in 2012 operating income would have been € 810 higher.

PENSION-RELATED LIABILITIES 2012 2011

Present value of fully financed obligations - 238Minus: fair value of fund investments - 142 Net liability - 96Unrealised actuarial gains and losses - -78 LIABILITY ON THE BALANCE SHEET - 18

The pension liability related to the settlement of the early retirement scheme liability for employees of Start People in the Netherlands with the foundation Stichting Pre-Start.

ASSET ARISING FROM PENSION SCHEMES 2012 2011 2010 2009 2008

Present value of fully financed obligations 164,261 128,368 124,736 91,345 85,151Minus: fair value of fund investments 159,234 124,191 121,269 88,714 95,776 Net liability 5,027 4,177 3,467 2,631 -10,625Unrealised actuarial gains and losses -10,154 -9,680 -9,515 -9,713 5,091 Pension asset on the balance sheet 5,127 5,503 6,048 7,082 5,534


In the income statement an amount of € 637 is recognised under cost of sales (2011: € 854) and € 2,794 under personnel expenses (2011: € 2,603).

2012 2011

Service costs 2,825 3,309Interest expenses 5,546 5,543Expected return on plan assets -5,423 -5,427Restructuring-related adjustment - -228Administrative costs 494 260Amortisation of actuarial losses -11 - TOTAL 3,431 3,457

2012 2011

LIABILITIES Balance as at 1 January 128,368 124,736Acquisition of subsidiaries - 769Current service costs 2,476 2,920Interest expenses 5,546 5,543Members’ contribution 814 1,039Actuarial gains and losses 30,206 -2,113Benefits paid -3,032 -4,249Restructuring-related adjustment -152 -381Currency translation differences 35 104 BALANCE AS AT 31 DECEMBER 164,261 128,368 INVESTMENTS Balance as at 1 January 124,191 121,269Acquisition of subsidiaries - 676Expected return on plan assets 5,423 5,427Actuarial gains and losses 29,591 -2,460Employers’ contribution 2,569 2,799Members’ contribution 873 1,110Benefits paid -3,032 -4,249Expenses paid -408 -460Currency translation differences 27 79 BALANCE AS AT 31 DECEMBER 159,234 124,191

24.1 Movements in pension liabilities and investments

24.2 Expenses as recognised in the income statement

127

24.3 Principal actuarial assumptionsBecause the commitments of the pension insurer are virtually the same with respect to the amount and term as the payment commitments ensuing from the defined benefit pension plan, fair value is defined as the present value of the relevant commitment

as set out in IAS 19.104. 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:

Calculations of the mortality rate at year-end 2012 for the Netherlands are based on the AG prognosis tables 2012-2062 (-1/-1) (2011: AG 2010-2060 (-1/-1)); calculations for Switzerland are based on mortality table BVG Generational (2011: BVG 2010 proj 2011).

Changes in the aforementioned assumptions will not have a substantial impact on equity and results, as shown in the financial statements.

2012 2011

Discount rate as at 31 December 1.9%-4.2% 2.3%-4.5%Expected long-term rate of return on assets as at 31 December 1.9%-3.5% 3.5%-4.5%Future salary increases 1.5%-4.0% 1.3%-4.0%Future pension increases 0.5%-1.0% 0.5%-1.0%Future inflation 1.3%-2.0% 1.3%-2.0%

25 PROVISIONS

Balance as at 1 January 2011 14,025 5,773 3,729 23,527Provisions added 33,455 2,375 31,052 66,882Provisions used -12,492 -1,689 -1,170 -15,351Provisions reversed -2,870 -2,120 -1,083 -6,073Currency translation differences -12 - 1 -11 Balance as at 31 December 2011 32,106 4,339 32,529 68,974 Non-current 5,941 2,842 3,390 12,173Current 26,165 1,497 29,139 56,801 BALANCE AS AT 31 DECEMBER 2011 32,106 4,339 32,529 68,974 Balance as at 1 January 2012 32,106 4,339 32,529 68,974Acquisition of subsidiaries - 546 - 546Provisions added 10,219 6,767 3,273 20,259Provisions used -19,693 -1,319 -2,810 -23,822Provisions reversed -10,039 -814 -1,324 -12,177Currency translation differences 5 - - 5 Balance as at 31 December 2012 12,598 9,519 31,668 53,785 Non-current 2,779 7,732 4,394 14,905Current 9,819 1,787 27,274 38,880 BALANCE AS AT 31 DECEMBER 2012 12,598 9,519 31,668 53,785

TOTALOTHER

PROVISIONS

PERSONNEL-RELATED

PROVISIONSRESTRUCTURING

PROVISIONS


A provision of € 10,219 was created in 2012 for restructuring of the activities. The provision relates to employee severance arrangements (€ 9,015) and the closure of branches (€ 1,204). Of the costs, a sum of € 2,330 is recognised as general and administrative expenses and € 7,889 as selling expenses in the income statement.

At the end of 2012 an amount of € 5,113 (2011: € 10,199) of the restructuring provision related to lease commitments on buildings that are no longer in use, while € 7,485 (2011: € 17,107) concerned employee severance arrangements.

In both 2012 and 2011 parts of the restructuring provision were reversed as less of the provision was required for employee severance arrangements and better than initially expected prospects for letting vacant premises. The amount of the restructuring provision for vacant premises largely depends on the 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 upon termination of service for reasons other than retirement and share plans settled in cash and cash equivalents. The provisions were determined on the basis of expectations concerning the recovery of sick employees, staff

turnover and expected wage increases. In addition a provision of € 4,041 was created in 2012 for pension liabilities for seconded flex workers.

The other provisions include an amount of € 20,386 relating to the settlement of the CGZP/AMP case in Germany. Following a legal ruling in December 2010 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 and subsequent payments to temporary employees. The authorities further examined the case in 2012, the outcome is not known yet.

Other provisions includes an amount in connection with the settlement of the liability relating to the acquisition of subsidiary Allgeier DL in Germany in 2008. The liability is estimated at € 6,423, including an amount of € 1,200 in interest.

Other items in the other provisions include the settlement of several legal proceedings.

Expected projected future cash flows are discounted using a factor of 1.0% (2011: 2.1%) if their impact is material. A change of 100 basis points in the discount rate results in a € 300 change in the existing value of the provision.

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 loan is reserved as a backstop to cover these programmes.

The maximum term of the loans concluded is three months. The finance costs are based on short-term EURIBOR. The programme was not used in 2011.

2012 2011

Current portion of non-current borrowings 19,693 124,225Bank overdrafts 13,953 16,322Commercial paper programmes 28,941 - 62,587 140,547

26 BANK OVERDRAFTS AND BORROWINGS

129

2012 2011

Trade payables 45,194 49,128Other payables 407,209 464,242Accrued liabilities 28,946 43,262 481,349 556,632

27 TRADE AND OTHER PAYABLES

2012 2011

Less than one year 53,705 57,635Between one to five years 98,787 113,855More than five years 12,722 21,503 165,214 192,993

Trade and other payables are current debts. Other payables in 2012 include € 7.5 million (2011: € 6.0 million) relating to undue payments by the factoring company in Belgium.

28 DERIVATIVE FINANCIAL INSTRUMENTSThe group uses interest rate derivatives to manage its liquidity and cash requirements. As the derivatives do not qualify for hedge accounting under IAS 39, the effectiveness or otherwise of derivatives does not apply. In principle derivatives are only agreed with the banks which issued the syndicated loan. The interest rate risks are managed as described below.

28.1 Interest rate derivatives In July 2008 interest rate derivatives were concluded to hedge the cash flow interest rate risk that existed at the time. The group hedged the risk of a rise in the one-month EURIBOR above 5.8% (6.0% on an annual basis) for a € 300 million principal for a period of five years.

Two different types of derivatives are in use:• A € 267.5million collar with a 5.8% cap and a 4.0% floor

(decreasing to 3% in the course of the term, see table below) one-month EURIBOR.

This hedging instrument was concluded with the banks which provided the syndicated loan.

• Adynamichedgewasconcludedfor€32.5millionwithoneofthe syndicate banks. This derivative has a term of five years and is based on a mathematical model that is rebalanced weekly based on an agreed decision tree. Weekly decisions are based on market rates (2, 5, 10 year interest rate swaps; 10-2 year spread) and volatility. This model equates to a maximum cap of 6.0% interest a year, less the BPSTAR2E index performance (Bloomberg: BPSTAR2E index).

At the end of 2012 the derivatives had a negative value of € 6,228 (2011: € 13,170). The counterparties did not demand or provide any guarantees for the derivatives.

29 COMMITMENTSThird-party property rental commitments, as well as lease and other liabilities, totalled around € 165.2 million at the end of 2012 (2011: € 193.0 million). A breakdown of these commitments according to maturity is as follows:

The group leases offices under an operating lease construction. The maturity of these contracts ranges from three to twelve years, with an option to extend at the end of the period.

€ 75 MILLION € 192.5 MILLION

2008 - 2009 4.00 4.00 2009 - 2010 3.70 4.00 2010 - 2011 3.40 3.55 2011 - 2012 3.00 3.35 2012 - 2013 3.00 3.20

DEVELOPMENT OF FLOOR INTEREST RATE PERCENTAGES


2012 2011

Salaries and other short-term staff remuneration 2,555 2,768Pensions 483 490Severance pay (including taxes payable by employer) - 963Share based payments 571 580Remuneration of Supervisory Board 302 327 3,911 5,128

30 CONTINGENT ASSETS AND LIABILITIES Due to the nature of the group’s activities, bank guarantees for a total amount of € 116,919 (2011: € 69,800) have been issued. The increase is mainly the result of a new € 41,794 bank guarantee to cover wage tax and VAT contributions owed to the Dutch government following a change in Dutch legislation that indemnifies hirers of temporary staff against any liability claims from 1 July 2012. The law makes it possible for temporary employment organisations to offer their clients security with regard to the payment of wage tax and VAT by the temporary employment organisation. The group complies with the requirements for this due in part to the conclusion of this bank guarantee.

USG People has created a provision for a number of operating companies due to the possible need to adjust its pension schemes to the scheme applied by the foundation Stichting Pensioenfonds voor Personeelsdiensten. USG People believes it is not necessary in all cases to change its pension schemes, although talks between USG People and the respective authority have not been completed yet.

On 12 February 2013 the Dutch district court in Arnhem ruled in favour of USG People N.V.’s appeal to an excessive supplementary assessment imposed by the Dutch Tax Authorities. The retrospective assessment is based on the Dutch legislation regarding assessments of excessive redundancy payouts and was related to the departure of a former director. Both parties can appeal the ruling with the Supreme Court of the Netherlands. The disputed amount concerns € 0.5 million.

In France, social security authority URSSAF imposed an assessment on our subsidiary Start People SAS in 2011 in connection with a social security investigation. The assessment is based on the assumption that taxes and social security contributions owed on the salaries of temporary employees were

calculated incorrectly. The assessment concerns the years 2009 and 2010 and amounts to € 16,922. The interest on the tax due was deemed to be € 849 at the end of 2012. USG People lodged an appeal against the URSSAF assessment with the Commission de Recours Amiable at the end of February 2012. This appeal was dismissed on 21 June 2012. USG People subsequently lodged an appeal with the Tribunal des affaires de sécurité sociale at the end of July 2012. USG People believes that the payments were in accordance with the law. Based on this information it is assumed that no liability exists and no provision has been created. USG People expects that the appeal it lodged will not be dealt with before the second half of 2013.

USG People Germany has submitted a claim to the former shareholder of Allgeier DL in connection with supplementary assessments relating to the settlement of the CGZP/AMP case. This claim is based on the guarantees and indemnities included in the sale and purchase agreement concluded in 2008. The time required to settle the matter is not known yet. It is currently impracticable to provide a reliable estimate of the financial effect.

Furthermore, in 2011 USG People in Germany filed lawsuits against former directors for reasons including a breach of a non-competition clause. The ruling is expected to be favourable and lead to a substantial compensation for USG People. The time required to complete the civil lawsuit is currently unknown. The estimated damage as a result of the aforementioned lawsuits amounts to € 21 million. The ultimate amount of possible claims is not yet known.

31 RELATED PARTIES

31.1 Remuneration of key managementKey management consists of the members of the Executive Board and the Supervisory Board.

The crisis surcharge imposed on the remuneration paid was € 234 in 2012. Share-based payments relates to the portion of Unique Share Plan costs allocated (note 9). The serverance pay in 2011 relates to the arrangement for the departure of Hans Coffeng.

32 EVENTS AFTER BALANCE SHEET DATEUSG People intends to sign an agreement to sell its operating company USG Energy, part of the Professionals division, on 28 February 2013. The transaction is subject to approval by the Dutch Competition Authority.

131

33 PRINCIPAL SUBSIDIARIES AND ASSOCIATES OF USG PEOPLE N.V.

COMPANY STAKE OWNED CITY, COUNTRY

Call-IT 100.0 Oostend, BelgiumExpress Medical 100.0 Wavre, BelgiumReceptel 100.0 Antwerp, BelgiumSecretary Plus Management Support 100.0 Antwerp, BelgiumStart People 100.0 Antwerp, BelgiumUnique 100.0 Antwerp, BelgiumUSG Innotiv 100.0 Antwerp, BelgiumUSG People Interservices 100.0 Antwerp, Belgium Technicum 100.0 Oldenburg, GermanySecretary Plus 100.0 Munich, GermanyUnique 100.0 Munich, Germany Secretary Plus 100.0 Paris, FranceStart People 100.0 Boulogne Billancourt, FranceFinancial Forces 100.0 Boulogne Billancourt, France Start People 100.0 Milan, Italy Start People 100.0 Luxembourg, Luxembourg Ad Rem 100.0 Almere, The NetherlandsCall-IT 100.0 Weert, The NetherlandsControl Finance 100.0 Utrecht, The NetherlandsCreyf’s Interim 100.0 Almere, The NetherlandsSecretary Plus Management Support 100.0 Almere, The NetherlandsStart People 100.0 Almere, The NetherlandsTechnicum Uitzendburo 100.0 Almere, The NetherlandsUnique Nederland 100.0 Almere, The NetherlandsUSG Capacity 100.0 Almere, The NetherlandsUSG Energy 100.0 Beverwijk, The NetherlandsUSG Innotiv 100.0 Almere, The NetherlandsUSG Juristen 100.0 Utrecht, The NetherlandsUSG Restart 100.0 Utrecht, The Netherlands Start People 100.0 Vienna, Austria Start People 100.0 Warsaw, Poland SYS Outsourcing 100.0 Madrid, SpainUnique 100.0 Madrid, Spain Start People 100.0 Geneva, SwitzerlandUniman 100.0 Lausanne, Switzerland

COMPANY INCOME STATEMENT


amounts in thousands of euros 2012 2011

Income of subsidiaries after taxes -168,718 -11,134Income of USG People N.V. after taxes -23,116 -29,025 NET INCOME -191,834 -40,159

COMPANY BALANCE SHEET AT 31 DECEMBER (BEFORE PROFIT APPROPRIATION)

note: amounts in thousands of euros 2012 2011 NON-CURRENT ASSETS 2 Intangible assets 642 563 3 Property, plant and equipment 716 41 4 Subsidiaries 933,809 1,082,9135 Other financial fixed assets 22,463 53,0166 Deferred taxes 7,794 13,308 Financial fixed assets 964,066 1,149,237 965,424 1,149,841 CURRENT ASSETS 7 Other current receivables 6,929 2,183 Taxes 10,113 6,537 Current receivables 17, 042 8,720 Cash and cash equivalents 6 - TOTAL ASSETS 982,472 1,158,561 8 SHAREHOLDERS’ EQUITY Paid-up and called-up capital 39,858 39,224 Share premium 366,532 367,166 Revaluation reserve 1,258 1,258 Currency translation reserve -485 -855 Other reserves 282,732 328,619 Net income for the financial year -191,834 -40,159 498,061 695,253 9 Provisions 803 1,302 10 Non-current liabilities 328,821 116,818 11 Current liabilities 154,787 345,188 TOTAL LIABILITIES 982,472 1,158,561

NOTES TO THE COMPANY INCOME STATEMENT AND BALANCE SHEET

1 ACCOUNTING PRINCIPLES FOR PREPARING THE COMPANY FINANCIAL STATEMENTSThe 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. In this 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 of valuation and determination of results in the company financial statements (including the principles for presenting financial instruments as liabilities or equity) as those applied in the consolidated financial statements. The company presents a condensed version of the income statement in accordance with article 402 Part 9 Book 2 of the Dutch Civil Code.

Change in accounting policy Participating interests in subsidiaries and other associates over which USG People N.V. is able to exercise dominant control or which it manages centrally are presented according to the equity method as set out by the Dutch Accounting Standard Board. The equity method is applied from 2012.

The presentation according to the equity method represents a change in accounting principle compared to the principles applied in the 2011 financial statements, when valuation was based on net asset value with goodwill shown separately on the balance sheet. The change in this accounting principle has been implemented in the interests of greater clarity and greater consistency with the methodology applied in practice. This change in accounting policy has consequences for the way in which goodwill and subsidiaries are presented on the balance sheet. This change in presentation has no implications for the size or composition of shareholders’ equity or the result. The comparative figures for 2011 have been restated.

2012 2011

Acquisition price 3,846 3,755Cumulative amortisation and impairment -3,283 -2,671 Carrying amount as at 1 January 563 1,084 Investments during the year 344 91Amortisation during the year -265 -612 Carrying amount as at 31 December 642 563 Breakdown of carrying amount Acquisition price 4,190 3,846Cumulative amortisation and impairment -3,548 -3,283 CARRYING AMOUNT 31 DECEMBER 642 563

2 INTANGIBLE ASSETS

COMPANY FINANCIAL STATEMENTS 135

2012 2011

Acquisition price 164 141Cumulative amortisation and impairment -123 -106 Carrying amount as at 1 January 41 35 Investments during the year 681 34Divestment during the year - -11Amortisation during the year -6 -17 Carrying amount as at 31 December 716 41 Breakdown of carrying amount Acquisition price 845 164Cumulative amortisation and impairment -129 -123 CARRYING AMOUNT AS AT 31 DECEMBER 716 41

3 PROPERTY, PLANT AND EQUIPMENT

2012 2011

Balance as at 1 January 1,082,913 1,095,596 Acquisition of subsidiaries 12,062 6,307Capital contribution to subsidiaries 17,000 -Divestment of subsidiaries - -2,706Result from subsidiaries -168,718 -11,134Adjustment of additional liability from acquisition of subsidiary -454 -Dividend received -9,364 -4,814Currency translation differences 370 -336 BALANCE AS AT 31 DECEMBER 933,809 1,082,913

4 SUBSIDIARIES

The acquisition of subsidiaries relates to the purchase of Control Finance B.V. in 2012 and the purchase of Vakcollege Groep B.V. in 2011 (see note 5 of the consolidated financial statements). The capital contribution to subsidiaries relates to an increase in the

capital of a subsidiary. The adjustment of the additional liability in 2012 relates to an adjustment of a contingent consideration. The divestment of subsidiaries in 2011 relates to the sale of two subsidiaries to another group company.


2012 2011

Balance as at 1 January 52,768 42,260 Loan granted - 10,508Loan repayment -30,568 - Balance as at 31 December 22,200 52,768

The movement of receivables from group companies is as follows:

6 DEFERRED TAXESThe deferred tax relates to recoverable losses and interest rate derivatives as included in the current liabilities (note 11).

2012 2011

Receivables from group companies 22,200 52,768Other 263 248 22,463 53,016

5 OTHER FINANCIAL FIXED ASSETS

2012 2011

Receivables from group companies 6,476 1,812Other receivables 453 371 6,929 2,183

7 OTHER CURRENT RECEIVABLES

137

8 EQUITY

Paid-up and called-up capitalThe authorised capital at both 31 December 2012 and 31 December 2011 stood at € 100 million, consisting of 200,000,000 ordinary shares with a nominal value of € 0.50 each.

Balance as at 1 January 2011 38,851 367,449 - -519 319,170 15,293 740,244Income for the year - - - - - -40,159 -40,159Issuance under share plan 90 - - - - - 90Stock dividend 283 -283 - - - - -Dividend for 2010 - - - - -5,642 - -5,642Income added to other reserves - - - - 15,293 -15,293 -Income added to revaluation reserve - - 1,258 - -1,258 - -Currency translation differences - - - -336 - - -336Share plan - - - - 1,056 - 1,056 BALANCE AS AT 31 DECEMBER 2011 39,224 367,166 1,258 -855 328,619 -40,159 695,253 Balance as at 1 January 2012 39,224 367,166 1,258 -855 328,619 -40,159 695,253Income for the year - - - - - -191,834 -191,834Stock dividend 634 -634 - - - - -Dividend for 2011 - - - - -6,334 - -6,334Income charged to other reserves - - - - -40,159 40,159 -Currency translation differences - - - 370 - - 370Share plan - - - - 606 - 606 BALANCE AS AT 31 DECEMBER 2012 39,858 366,532 1,258 -485 282,732 -191,834 498,061

SHARE PREMIUM RESERVE

PAID-UP AND CALLED-UP

CAPITALREVALUATION

RESERVE

RESERVE FOR TRANSLATION DIFFERENCES

OTHER RESERVES

RESULT FOR THE YEAR TOTAL

2012 2011

Deferred income tax liabilities 185 1,288Personnel-related provisions 618 14 803 1,302

9 PROVISIONS

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.


2012 2011

Current portion of non-current borrowings 63,241 271,767Trade and other payables 4,204 7,168Debts to group companies 81,114 53,083Interest rate derivatives 6,228 13,170 154,787 345,188

11 CURRENT LIABILITIES

2012 2011

Value of non-current interest-bearing borrowings and liabilities 392,062 388,585Current portion of non-current borrowings -63,241 -271,767 328,821 116,818

10 NON-CURRENT LIABILITIES

‘Start’ subordinated loan 18,241 18,241 - - -Syndicated revolving credit facility 213,679 - - 213,679 -Contingent consideration acquired subsidiaries 414 - - - 414Group company loans 159,728 45,000 114,728 - - 392,062 63,241 114,728 213,679 414


12 EMPLOYEESAt the end of 2012 USG People N.V. employed 50 people (2011: 60), all in the Netherlands. 13 LIABILITYThe company and many of its Dutch operating companies together form a fiscal unity for income tax purposes. Each of the operating companies is jointly and severally liable for income tax payable by all companies belonging to the fiscal unity.

14 AUDIT FEESThe fees of PricewaterhouseCoopers Accountants N.V. and its affiliates in the countries where the group is active are specified as follows for the financial years:

The above fees relate to activities performed for the company and consolidated operating companies by accountant organisations and independent external auditors, 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 the accountant organisation belongs. An amount of € 835 of the € 1,847 (2011: € 1,275 of € 2,327) was charged by PricewaterhouseCoopers Accountants N.V.

2012 2011

Audit of the financial statements 1,625 1,692Other audit activities 61 504Other non-audit services 161 131 1,847 2,327

139

15 REMUNERATION OF EXECUTIVE BOARD AND SUPERVISORY BOARDThe remuneration of members of the Executive Board is as follows:

ROB ZANDBERGEN 2012 625 143 135 189 - 1,092 1182011 625 143 188 210 - 1,166 - LEEN GEIRNAERDT 2012 400 92 87 130 - 709 362011 350 81 105 132 - 668 - HANS COFFENG 2012 - - - - - - -2011 400 92 120 -64 963 1,511 - ERIC DE JONG 2012 400 92 86 121 - 699 22011 400 92 120 136 - 748 - HUBERT VANHOE 2012 350 81 75 45 - 551 272011 29 7 9 70 - 115 - ALBERT JAN JONGSMA 2012 325 75 72 86 - 558 512011 325 75 98 96 - 594 -

PENSIONCONTRIBUTION

FIXED REMUNERATION

VARIABLE SHORT-TERM CASH REMU-

NERATION

VARIABLE LONG-TERM

SHARE REMU-NERATION1)

SEVERANCE PAY TOTAL

CRISISLEVY²)

1) Including shares granted under the Unique Share Plan 2008-2010 and the Unique Share Plan 2011-2014, recognised in accordance with IFRS2

2) 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 € 234 was recognised as personnel costs for Executive Board members

in 2012. The amounts for individual Executive Board members vary depending on the applicable tax conditions.

The fixed remuneration, pension contribution and the variable short-term cash remuneration are stated for the period in which the position of member of the Executive Board was fulfilled. In 2011 this was from 1 December to 31 December 2011 for Hubert Vanhoe. The variable long-term share remuneration is stated for the full year.

No loans have been granted, nor have any guarantee commitments been made for the benefit of the Executive Board members. 15.1 Remuneration policyThe remuneration policy was approved by the General Meeting of

Shareholders in 2011. The remuneration of the Executive Board consisted of four components in 2012:

Fixed remuneration The fixed part of the remuneration is assessed and set periodically for a longer period of time, taking into account the level of experience and responsibilities of the respective executive board members.

Pension contribution The pension contribution amounts to 23% of the fixed remuneration and is not subject to a maximum.


Variable short-term cash remuneration The variable short-term cash remuneration is linked to financial performance targets for up to 70% of the fixed remuneration. For 2012 these targets related to EBITA (earnings before interest, tax and amortisation) as a percentage of revenue and gross margin. In addition the variable short-term cash remuneration is linked to a predetermined absolute target for average DSO (days sales outstanding). A linear discount factor of up to 10% is applied to the part of the variable short-term cash remuneration that is linked to the financial results if the DSO target is not achieved. In addition, a part of the variable short-term cash remuneration (up to 30% of fixed salary) depends on non-financial performance targets. The objectives for 2012 were set for the target areas leadership, social responsibility and innovation. The variable short-term cash remuneration of all Executive Board members is subject to a maximum of one time fixed remuneration, excluding pension contribution. If EBITA and revenue growth fail to meet the threshold of the financial performance targets and the non-financial performance targets are not achieved at all, the variable short-term cash remuneration will be zero. The financial and non-financial performance targets are set annually by the Supervisory Board.

Variable long-term share remuneration, Unique Share Plan The variable long-term share remuneration is set for a period of four years (2011-2014). The performance targets that need to be met are the same as the targets that apply to the variable short-term cash remuneration. These targets are 70% linked to financial results and 30% to non-financial targets. The variable long-term share remuneration is not linked to average DSO. If the maximum results are achieved (with regard to both financial and non-financial targets), then the number of shares to be granted conditionally equals 170% of the target number of shares (2 x 70% + 30%) per year. If the results with regard to the financial and non-financial targets in any performance year are lower than the defined threshold, then the number of shares to be granted conditionally is zero. The company will pay the wage tax at the moment the shares are unconditionally granted. The gross value of the shares conditionally granted for each individual performance year is set at a maximum of one time the fixed remuneration excluding pension contribution. The average closing share price in the performance year in question will be used in determining the value of the shares granted. After this period of four years the sum of all shares conditionally granted each year will be granted unconditionally if the board member is still in the employment of the group at that time. A holding period (during which time the shares may not be transferred) of one year will apply after the shares are unconditionally granted.

Adjustment of conditional remuneration componentsThe Supervisory Board is authorised to adjust the value of a conditional remuneration component awarded in a previous financial year upwards or downwards, if the Supervisory Board deems it unreasonable due to exceptional circumstances in the period during which predetermined performance criteria are or should have been achieved. The Supervisory Board is authorised to reclaim from the executive board member any variable remuneration granted on the basis of incorrect financial or other information.

Variable cash remuneration for 2012 The members of the Executive Board in consultation with the Supervisory Board have decided to waive part of the variable cash remuneration to which they would be entitled for the 2012 performance year. Both the Supervisory Board and the Executive Board believe that under the current difficult economic conditions the decision to adjust the variable cash remuneration downwards to 40% of the variable cash remuneration achieved gives a clear and appropriate signal to all internal and external stakeholders of USG People. For the 2012 performance year the realised variable cash remuneration ranged from 53.9% to 55.1%; as a result of the downward adjustment the range of the actual variable cash remuneration for 2012 will be between 21.6% and 22.0%.

15.2 Variable long-term share remunerationUnique Share Plan 2008-2010The Unique Share Plan 2008-2010 covers the period from 1 January 2008 to 1 January 2014. The initial unconditional delivery of shares took place in May 2011. In addition to the participant still being in the employment of the group at the time of unconditional delivery, the performance criteria are based on the extent to which targets for revenue and the operating result excluding amortisation (EBITA) as a percentage of revenue were actually met in the years 2008, 2009 and 2010. A revenue and EBITA matrix applied to each year that could result in a minimum of zero times and a maximum of 190.0% times the norm number of shares being granted unconditionally. The actual unconditional granting of shares was based on a factor of 40.0% for 2008, 0.0% for 2009 and 140.0% for 2010. Furthermore an additional 25% shares will be granted in May 2014, provided the participant has retained the shares delivered in May 2011 until the date of the General Meeting of Shareholders in 2014 and provided the participant is still in USG People’s employment at that time.

141

ROB ZANDBERGEN 2008 15,000 40.0% 6,000 1,500 4 -92009 15,000 0.0% - - - -2010 17,500 140.0% 24,500 6,125 15 -37 47,500 30,500 7,625 19 -46 LEEN GEIRNAERDT 2008 400 40.0% 160 40 - -2009 500 0.0% - - - -2010 1,750 140.0% 2,450 612 1 -4 2,650 2,610 652 1 -4 HANS COFFENG 2008 5,000 40.0% 2,000 - - -82009 5,000 0.0% - - - -2010 10,000 140.0% 14,000 - - -57 20,000 16,000 - - -65 ERIC DE JONG 2008 5,000 40.0% 2,000 500 1 -32009 5,000 0.0% - - - -2010 10,000 140.0% 14,000 3,500 8 -23 20,000 16,000 4,000 9 -26 HUBERT VANHOE 2008 800 40.0% 320 42 - -2009 800 0.0% - - - -2010 1,600 140.0% 2,240 296 - - 3,200 2,560 338 - - ALBERT JAN JONGSMA 2008 3,000 40.0% 1,200 300 1 -22009 3,000 0.0% - - - -2010 7,500 140.0% 10,500 2,625 6 -16 13,500 11,700 2,925 7 -18

FACTOR FOR COST

CALCULATION

CONDITIONALLYGRANTED

BASED ON NORM NUMBERS

UNCONDITIONALLY GRANTED IN 2011

ADDITIONAL SHARES TO BE

GRANTED IF RETAINED FROM

2011-20141)

CHARGE IN 2012 INCOME

STATEMENT


STATEMENT

Unique Share Plan 2011-2014The Unique Share Plan 2011-2014 covers the period from 1 January 2011 to 1 January 2015. The shares will be unconditionally granted in May 2015, after which a holding period of one year applies.

The performance criteria are based on a matrix of financial and non-financial performance targets.

For 2012 the matrix of financial performance targets is based on a ratio of underlying EBITA to the gross result (conversion ratio) ranging from 13.4% and 23.6% and a ratio of underlying EBITA to net revenue of between 2.8% and 5.2%. For 2011 the matrix was based on revenue of between € 3.3 billion and € 3.9 billion and a underlying EBITA percentage of between 3.4% and 5.2%.

1) The additional shares granted to Hans Coffeng have ceased to apply due to the termination of his employment.


Additional non-financial performance criteria have been agreed with executive board members which can result in a maximum of 30.0% of the norm number of shares being granted conditionally in each performance year. As a result, the maximum factor applicable to executive board members is 170% times the norm number of shares. The wage tax of executive board members is payable by the group. The gross value of the shares conditionally granted

each year is set at a maximum of one time fixed remuneration. The gross value is calculated using the average share price in the course of the performance year concerned. For 2012 a factor in a range of 55.3% to 56.5% has been taken into account (2011: 30.0%), resulting in the conditional granting of 40,378 shares (2011: 18,250). The executive board member must still be in the employment of the group at the time of unconditional granting.

ROB ZANDBERGEN 2011 22,500 30.0% 6,750 21 222012 22,500 55.5% 12,488 7 742013 22,500 100.0% 22,500 71 742014 22,500 100.0% 22,500 71 74 90,000 64,238 170 244 LEEN GEIRNAERDT 2011 12,500 30.0% 3,750 12 122012 15,000 56.1% 8,415 11 412013 15,000 100.0% 15,000 53 412014 15,000 100.0% 15,000 53 41 57,500 42,165 129 135 ERIC DE JONG 2011 15,000 30.0% 4,500 14 152012 15,000 55.3% 8,295 4 492013 15,000 100.0% 15,000 47 492014 15,000 100.0% 15,000 47 49 60,000 42,795 112 162 HUBERT VANHOE 2011 833 30.0% 250 1 12012 10,000 55.3% 5,530 2 232013 10,000 100.0% 10,000 21 232014 10,000 100.0% 10,000 21 23 30,833 25,780 45 70 ALBERT JAN JONGSMA 2011 10,000 30.0% 3,000 10 92012 10,000 56.5% 5,650 3 352013 10,000 100.0% 10,000 33 352014 10,000 100.0% 10,000 33 35 40,000 28,650 79 114

FACTOR FOR COST

CALCULATION

CONDITIONALLY GRANTED

BASED ON NORM NUMBERS

CONDITIONAL NUMBER

BASED ON PERFORMANCE IN

FINANCIAL YEAR AND ESTIMATE FOR

COMING YEARS1)


STATEMENT


STATEMENT

1) This number is based on the actual performance in 2011 and 2012 and assumed performance in the years 2013 and 2014.

143

15.3 Supervisory BoardThe remuneration of the Supervisory Board is as follows: 2012 2011

Cees Veerman 67 67Christian Dumolin 27 52Joost van Heyningen Nanninga 52 52Rinse de Jong 52 52Marike van Lier Lels 52 52Alex Mulder 52 52 302 327

Christian Dumolin’s term of office ended in May 2012.

No option rights are granted to Supervisory Board members and no operating assets are made available to them. No loans have been granted to Supervisory Board members, nor have any guarantee commitments been made available for the benefit of the Supervisory Board members.

Almere, 27 februari 2013

Supervisory BoardCees Veerman (chairman)Joost van Heyningen NanningaRinse de JongMarike van Lier LelsAlex Mulder

Executive BoardRob Zandbergen (CEO)Leen Geirnaerdt (CFO)Hubert Vanhoe (COO)Eric de Jong (COO)Albert Jan Jongsma (CCO)

COMPANY FINANCIAL STATEMENTS 145

OTHER DATA

EVENTS AFTER BALANCE SHEET DATE

USG People intends to sign an agreement to sell its operating company USG Energy, part of the Professionals division, on 28 February 2013. The transaction is subject to approval by the Dutch Competition Authority.

PROVISIONS IN THE ARTICLES OF ASSOCIATION REGARDING PROFIT APPROPRIATION

ARTICLE 29 PROFIT AND DISTRIBUTIONS29.1 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 plus the 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 ended financial 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 the number 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 set by 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 of four (4) percentage points, depending on the situation at such time.If, in the financial year in which the distribution referred to above is made, the amount mandatorily paid up on the Preference Shares is reduced or, pursuant to a resolution for an additional payment, is increased, the distribution shall 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 and charged 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 shares from 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 holders of 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 an inalienable 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 the distribution, 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 shares referred to above at the time the profit was determined, to be calculated time-proportionately for the period that he was a holder of these preference shares in said financial year, which distribution shall be reduced by the amount of the distribution that was made in accordance with the provisions of article 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 be reduced 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 the provisions 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 29.1 concerning the capital position has been satisfied, the Executive Board may make one or more interim distributions to the holders of ordinary shares and/or the holders of preference shares with the approval of the Supervisory Board, with due observance, however, of the maximum referred to in articles 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 be made 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 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 the General Meeting in accordance with articles 7.1 and 7.3. Subject to

the approval of the Supervisory Board, the Executive Board shall set the conditions under 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 no distribution 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 29.1 has been satisfied, which must be evidenced by an (interim) statement of assets and liabilities drawn up in accordance with the provisions prescribed by law.

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 at the 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 APPROPRIATION

The Executive Board proposes to distribute a dividend of € 0.12 per ordinary share, payable either in cash or in shares. Based on 79,715,875 shares this amounts to a total dividend distribution of € 9,566. The difference between the net income of -€191,834 and the proposed dividend distribution, being € 201,400, will be charged to the other reserves.

OTHER DATA 147

INDEPENDENT AUDITOR’S REPORT

To: the General Meeting of Shareholders of USG People N.V. Report on the financial statementsWe have audited the accompanying financial statements 2012 of USG People N.V., Almere as set out on pages 78 to 144. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2012, the consolidated income statement, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended 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 2012, the company income statement for the year then ended and the notes, comprising a summary of accounting policies and other explanatory information.

The Executive Board’s responsibilityThe Executive Board is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union 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. Furthermore, the Executive Board is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Executive Board, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statementsIn 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 2012, and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code.

Opinion with respect to the company financial statementsIn our opinion, the company financial statements give a true and fair view of the financial position of USG People N.V. as at 31 December 2012, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirementsPursuant to the legal requirement under Section 2: 393 sub 5 at e and f of the Dutch Civil Code, 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 under Section 2: 392 sub 1 at b-h has been annexed. Further we report that the report of the Executive Board, to the extent we can assess, is consistent with the financial statements as required by Section 2: 391 sub 4 of the Dutch Civil Code.

Amsterdam, 27 February 2013

PricewaterhouseCoopers Accountants N.V. Original has been signed by: P.J. van Mierlo RA

OTHER DATA 149

Amounts in thousands of euros, unless otherwise stated 2012 2011 2010 2009 2008 2007 2006 2005 2004 2004 1) 2003 1)

CONSOLIDATED INCOME STATEMENT Revenue 2,876,204 3,244,772 3,098,630 3,001,134 4,024,965 3,887,681 3,536,836 1,977,609 1,300,250 1,300,250 1,297,800Percentage growth compared to previous period -11.4% 4.7% 3.2% -25.4% 3.5% 9.9% 78.8% 52.1% 0.2% 0.2% 17.5%Operating income -164,525 -4,386 43,094 760 116,665 243,859 194,206 64,185 36,867 13,203 39,514Percentage growth compared to previous period 3651.1% -110.2% 5570.3% -99.3% -52.2% 25.6% 202.6% 74.1% -6.7% -66.6% -33.5%As a percentage of net revenue -5.7% -0.1% 1.4% 0.0% 2.9% 6.3% 5.5% 3.2% 2.8% 1.0% 3.0%Net income -191,834 -40,159 15,293 -30,965 16,885 140,011 110,853 21,077 24,189 14,784 14,709Percentage growth compared to previous period 377.7% -362.6% 149.4% -283.4% -87.9% 26.3% 425.9% -12.9% 63.7% 0.5% -40.8%As a percentage of revenue -6.7% -1.2% 0.5% -1.0% 0.4% 3.6% 3.1% 1.1% 1.9% 1.1% 1.1%Operating cash flow 29,037 104,609 105,569 226,317 276,510 201,389 165,151 114,974 46,927 39,162 74,580Dividend 9,566 13,336 12,432 - 37,688 51,581 45,445 12,593 9,075 9,075 9,074Dividend / net income -5.0% -21.5% 81.3% - 223.2% 36.8% 41.0% 59.7% 37.5% 61.4% 61.7% CONSOLIDATED BALANCE SHEET Non-current assets 907,658 1,127,701 1,148,359 1,172,434 1,200,115 1,086,958 1,066,482 1,099,438 309,868 278,724 311,331Current assets - current liabilities -164,300 -271,445 -137,972 -138,920 26,721 107,030 -2,729 -32,989 44,009 63,883 76,166 743,358 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753 1,066,449 353,877 342,607 387,497 Shareholders’ equity 498,061 695,253 740,244 638,812 669,777 684,684 574,420 472,209 218,771 200,057 194,468Minority interests 551 542 554 529 1,402 1,028 1,129 2,264 385 385 178Non-current liabilities 244,746 160,461 269,589 394,173 555,657 508,276 488,204 591,976 134,721 142,165 192,851 743,358 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753 1,066,449 353,877 342,607 387,497 OTHER KEY FIGURES Shareholders’ equity / total equity plus liabilities 36.9% 42.0% 44.2% 38.9% 34.0% 34.9% 30.2% 22.9% 36.2% 34.4% 30.4%Current assets / current liabilities 0.73 0.66 0.79 0.77 1.04 1.14 0.90 0.97 1.18 1.27 1.30 Number of shares as at 31 December (nominal value € 0.50) 79,715,875 78,448,505 77,702,427 70,682,433 70,633,400 63,679,719 63,117,700 62,969,532 45,376,634 45,376,634 45,370,704 FIGURES PER SHARE (NOMINAL VALUE € 0.50) IN EUROS Net income 2) -2.42 -0.51 0.20 -0.44 0.24 2.21 1.76 0.33 0.54 0.33 0.33Operating cash flow 2) 0.37 1.34 1.38 3.20 4.29 3.18 2.62 2.31 1.04 0.87 1.65Dividend 0.12 0.17 0.16 - 0.58 0.81 0.72 0.20 0.20 0.20 0.20Equity 6.25 8.86 9.53 9.04 10.31 10.75 9.10 7.50 4.82 4.41 4.29

1) Under Dutch GAAP

2) Based on average number of shares outstanding

TEN-YEAR OVERVIEW

ADDITIONAL INFORMATION

Amounts in thousands of euros, unless otherwise stated 2012 2011 2010 2009 2008 2007 2006 2005 2004 2004 1) 2003 1)

CONSOLIDATED INCOME STATEMENT Revenue 2,876,204 3,244,772 3,098,630 3,001,134 4,024,965 3,887,681 3,536,836 1,977,609 1,300,250 1,300,250 1,297,800Percentage growth compared to previous period -11.4% 4.7% 3.2% -25.4% 3.5% 9.9% 78.8% 52.1% 0.2% 0.2% 17.5%Operating income -164,525 -4,386 43,094 760 116,665 243,859 194,206 64,185 36,867 13,203 39,514Percentage growth compared to previous period 3651.1% -110.2% 5570.3% -99.3% -52.2% 25.6% 202.6% 74.1% -6.7% -66.6% -33.5%As a percentage of net revenue -5.7% -0.1% 1.4% 0.0% 2.9% 6.3% 5.5% 3.2% 2.8% 1.0% 3.0%Net income -191,834 -40,159 15,293 -30,965 16,885 140,011 110,853 21,077 24,189 14,784 14,709Percentage growth compared to previous period 377.7% -362.6% 149.4% -283.4% -87.9% 26.3% 425.9% -12.9% 63.7% 0.5% -40.8%As a percentage of revenue -6.7% -1.2% 0.5% -1.0% 0.4% 3.6% 3.1% 1.1% 1.9% 1.1% 1.1%Operating cash flow 29,037 104,609 105,569 226,317 276,510 201,389 165,151 114,974 46,927 39,162 74,580Dividend 9,566 13,336 12,432 - 37,688 51,581 45,445 12,593 9,075 9,075 9,074Dividend / net income -5.0% -21.5% 81.3% - 223.2% 36.8% 41.0% 59.7% 37.5% 61.4% 61.7% CONSOLIDATED BALANCE SHEET Non-current assets 907,658 1,127,701 1,148,359 1,172,434 1,200,115 1,086,958 1,066,482 1,099,438 309,868 278,724 311,331Current assets - current liabilities -164,300 -271,445 -137,972 -138,920 26,721 107,030 -2,729 -32,989 44,009 63,883 76,166 743,358 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753 1,066,449 353,877 342,607 387,497 Shareholders’ equity 498,061 695,253 740,244 638,812 669,777 684,684 574,420 472,209 218,771 200,057 194,468Minority interests 551 542 554 529 1,402 1,028 1,129 2,264 385 385 178Non-current liabilities 244,746 160,461 269,589 394,173 555,657 508,276 488,204 591,976 134,721 142,165 192,851 743,358 856,256 1,010,387 1,033,514 1,226,836 1,193,988 1,063,753 1,066,449 353,877 342,607 387,497 OTHER KEY FIGURES Shareholders’ equity / total equity plus liabilities 36.9% 42.0% 44.2% 38.9% 34.0% 34.9% 30.2% 22.9% 36.2% 34.4% 30.4%Current assets / current liabilities 0.73 0.66 0.79 0.77 1.04 1.14 0.90 0.97 1.18 1.27 1.30 Number of shares as at 31 December (nominal value € 0.50) 79,715,875 78,448,505 77,702,427 70,682,433 70,633,400 63,679,719 63,117,700 62,969,532 45,376,634 45,376,634 45,370,704 FIGURES PER SHARE (NOMINAL VALUE € 0.50) IN EUROS Net income 2) -2.42 -0.51 0.20 -0.44 0.24 2.21 1.76 0.33 0.54 0.33 0.33Operating cash flow 2) 0.37 1.34 1.38 3.20 4.29 3.18 2.62 2.31 1.04 0.87 1.65Dividend 0.12 0.17 0.16 - 0.58 0.81 0.72 0.20 0.20 0.20 0.20Equity 6.25 8.86 9.53 9.04 10.31 10.75 9.10 7.50 4.82 4.41 4.29

151

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 result before amortisation and impairment of acquisition-related intangible assets.

EBITA MARGINEBITA as a percentage of revenue.

EBITDAOperating result before depreciation, amortisation and impairment of acquisition-relatedintangible fixed assets.

FINANCIAL DERIVATIVESFinancial instruments to cover financial risks. The value is derived from thedevelopment 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 tax.

FINANCIAL GLOSSARY

ADDITIONAL INFORMATION

USG PEOPLE N.V.P.O. Box 11300 AA Almere

Landdrostdreef 1241314 SK AlmereThe Netherlands

+31 (0)36 529 95 [email protected]

DESIGN / REALISATIONmost remarkable bv

PUBLISHERDrukkerij Snep B.V.

PHOTOGRAPHYHans-Peter van Velthoven

TRANSLATIONAbacus Translation

FINAL EDITINGUSG People N.V.Corporate Communication

COLOPHON

153

www.usgpeople.comThe USG People 2012 annual report is printed on 300 and 135 grams Heaven 42 (FSC certified).

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