www.stepstone.com CAPITAL MARKETS DAY 2016 STEPSTONE - SHAPING THE FUTURE OF E-RECRUITMENT 08.12.2016 RALF BAUMANN CEO STEPSTONE
www.stepstone.com
CAPITAL MARKETS DAY 2016 STEPSTONE - SHAPING THE FUTURE OF E-RECRUITMENT 08.12.2016
RALF BAUMANN
CEO STEPSTONE
www.stepstone.com 2.
TODAY WE ARE GOING TO COVER DIFFERENT TOPICS
1. State of the business ‘Continued growth’
2. Growth elements ‘Various elements drive our growth’
3. Business environment ‘A candidate centric development’
4. StepStone product strategy ‘Our way to an E-Sourcing company’
5. StepStone’s tech and business… ‘We are shaping the future of E-Recruitment’
www.stepstone.com 3.
STEPSTONE – A MARKET LEADING JOB BOARD GROUP
50+
million
VISITS PER MONTH
16
million
SUBSCRIBERS
26
million
CVs
650
thousand
JOBS PER MONTH¹
32%
Ø ANNUAL REVENUE
GROWTH SINCE 2005
2,200+ EMPLOYEES
21 COUNTRIES
130+ COUNTRIES VIA
THE NETWORK
¹ Comprises the entire StepStone Group
www.stepstone.com 4.
CONTINUED GROWTH IN 2016
297
CAGR: +32%
2015 2016
362
262
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Group Revenue (EURm)
StepStone outperforms other players...
... and has survived numerous so called
‘disruptive business models’
Lehman
9 months
Unemploy-
ment Office Company
websites
Google base
referral sites
Craigslist Social
networks Agents Google
Jobs
Social
networks Social
networks
Indeed / Meta
search engines Google /
Indeed
www.stepstone.com 5.
F/X Effect against previous
year
ORGANIC GROWTH ON A HIGH LEVEL
146
11.0 -10.6
+13%
+25%
2.5
182
262
9M 2013 9M 2014¹
+44%
9M 2015 9M 2016
297
9.7%
Group Revenue (EURm)
F/X effects on revenue vary over years....
20.6% 16.6% Organic growth:
...Organic growth in high double digit numbers!
www.stepstone.com 7.
STEPSTONE WILL CONTINUE TO GROW
External growth elements
1. There will always be a need to recruit
= basic requirement
2. Long-term economic growth
3. Structural growth drivers foster our market,
particularly the shift from print to online
4. We are operating in a nearly endless market:
In Germany / UK we have currently reached
ca. 80k out of over 600k potential customers
Internal growth elements Impact of elements varies across StepStone countries Factors are not distinct from each other, but correlate
Customer
penetration
High demand
within firms to
find talent
Value
sharing
Enlargement
of product
portfolio
Relevant
acquisitions
www.stepstone.com 8.
STEPSTONE WILL CONTINUE TO GROW
External growth elements
1. There will always be a need to recruit
= basic requirement
2. Long-term economic growth
3. Structural growth drivers foster our market,
particularly the shift from print to online
4. We are operating in a nearly endless market:
In Germany / UK we have currently reached
ca. 80k out of over 600k potential customers
Internal growth elements Impact of elements varies across StepStone countries Factors are not distinct from each other, but correlate
Customer
penetration
High demand
within firms to
find talent
Value
sharing
Enlargement
of product
portfolio
Relevant
acquisitions
www.stepstone.com 9.
Print Online
PRINT TO ONLINE: EURM >30 CONVERSION PER YEAR
929
528
2015 2007
157
399
2015 2007
Volume (EURm)¹ Volume (EURm)²
- 2007: Skilled segment mainly covered by FAZ and FT
- 2015: Mainly regional newspapers utilised (>80% of total)
¹ Source: Data from ZAW/BDVZ ² Source: Anzeigendaten.de, market insights
- 2007: Coverage of all segments as an alternative for print
- 2015: Continued conversion of ca. 60% of print volume
www.stepstone.com 10.
PRINT TO ONLINE: POTENTIAL IN MEDIUM SKILLED SECTOR
Total listings in 2015:
0.43m ¹ Total listings in 2015:
6.35m ¹
¹ Source: Anzeigendaten.de, incl. Staffing; Indeed is not correctly reflected - Only Anzeigendaten.de estimate of premium listings included
0.21 0.22
0.5
2.54
1.24
2.07
Paid Paid Free
= 5.6x print listings
Medium skilled sector
High skilled sector
Medium skilled sector
High skilled sector
Print Online
www.stepstone.com 11.
TARGETING OF LONG-TAIL EXTENDS CLIENT NUMBER
Customer development 2014-2016 (in thousand)¹
CAGR: +12%
FC 2016
48.4
FY 2015
40.7
FY 2014
38.9
¹ Equals amount of final customers; Customers with listings that were online for less than 1 day are excluded
Growth through addressing the long tail
Customer penetration
www.stepstone.com 13.
5
10
15
20
25
0.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.0
7.5
07/12 04/13
10.3
7.2
10/13 04/11 01/12 07/13 10/12
13.2 13.4
04/12 01/16 04/16 07/16 10/16 10/15 07/15 04/15 01/15 10/14 07/14 04/14 07/11 10/11 01/11
8.2
01/13 01/14
7.9 8.9 8.6
10.9 10.4
8.7 9.8
9.1 8.5
6.5
9.5
11.4 11.3 11.6 11.1
7.4
9.2
6.8
JOBSITE: RETURN TO QUALITATIVE PERFORMANCE Relevant acquisitions
Unique visits Applications per vacancy¹
Applications per vacancy
Jobsite – Performance Optimisation
Unique Visits (m)
¹ On a monthly basis
www.stepstone.com 14.
5
10
15
20
25
0.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.0
7.5
07/12 04/13
10.3
7.2
10/13 04/11 01/12 07/13 10/12
13.2 13.4
04/12 01/16 04/16 07/16 10/16 10/15 07/15 04/15 01/15 10/14 07/14 04/14 07/11 10/11 01/11
8.2
01/13 01/14
7.9 8.9 8.6
10.9 10.4
8.7 9.8
9.1 8.5
6.5
9.5
11.4 11.3 11.6 11.1
7.4
9.2
6.8
JOBSITE: RETURN TO QUALITATIVE PERFORMANCE
Jobsite – Performance Optimisation
Relevant acquisitions
Unique visits Applications per vacancy¹
387
3,066
09/2011
New Clients²:
Posting Clients³:
281
3,250
09/2012
443
3,727
09/2013
368
3,699
09/2014
359
3,793
09/2015
373
4,787
09/2016
¹ On a monthly basis ² Includes companies that purchased at least one contract during the respective month ³ All clients that have a contract and posted a job ad in the respective month
www.stepstone.com 15.
2017: Leverage of brand and company potentials
1. Further improvement of candidate delivery
• Usage of technological group competencies
• Increase of candidate reach & product customisation
2. Capitalisation of product performance in sales
• Built up on increased candidate delivery and product performance
• Apply best-in-class sales know-how / group competencies
3. In addition, revitalization of brand awareness:
• Extension of own campaigns to strengthen business position
• Follow the German example: Recently StepStone.de was awarded by Handelsblatt as one of the top 5 most popular online brands together with Skype, WhatsApp, Google+ and Pinterest ¹
¹ Category ‘Digital Life / Social web, Dating & Recruiting Sites’ www.stepstone.com 15.
JOBSITE: RETURN TO PERFORMANCE Relevant acquisitions
www.stepstone.com 17.
OWNERSHIPS CHANGE, THE BUSINESS DOES NOT
Buyer Target Acquisition Rationale
2012:
Price: ~$ 1bn¹ • Recruit aims to become no. 1 global HR service provider
2016:
Price: $ 26bn • Combination of MS Cloud with Linkedin’s network
2016:
Price: $ 429m
• Acquisition ensures access to candidate market = mission critical
2016:
Price: ~$ 50m¹ • Market consolidation among US aggregators
¹ No official acquisition price has been released. Figures are based on market insights
www.stepstone.com 18.
THE US BUSINESS IS GROWING SIGNIFICANTLY
Revenue development US business (in m USD)1
346560
583
810
195
214
263
260
719
748
713
690
463
474
501
474
887
924
1.327
1.561
188370
CAGR: +21%
2015
4.702
1.157²
2014
3.960
2013
3.131
23
2012
2.657
Estimate of top Strategy Consultancy :
Growth of ~7% p.a. for 14-18
1 Source: company data for LinkedIn, Monster and Dice. Indeed: StepStone estimation of revenue distribution for US business. Global data reported by Recruit. CareerBuilder: Data for
2012 and 2013 contain the segment “digital” of Gannett, including other companies. Craigslist: Estimation by AIM group for 2013 and 2014. 2012 and 2015 estimated by StepStone
based on AIM group. Other players based on company data, business knowledge and StepStone estimations
² Only segment talent solutions. Ca. 50% of revenue are allocated to direct search, 10% Lynda.com and the remaining 40% to branding and job slots
Other
(direct search accounts for ~50%)
www.stepstone.com 19.
CANDIDATE CENTRIC TRENDS AND DEVELOPMENT
StepStone learnings
1. Being on-top of core business
2. Drive and capitalise on candidate centric trends
(product and services)
3. Secure long term success by driving on innovations
along E-Recruitment cycle (venture new bets)
Market trends
• Basic principles of job search remain (perfect match)
• Recruiters’ search for talented candidates intensified
• Candidates expect better products & services
• Other players try to solve new recruiter needs
respectively increased candidate expectations
www.stepstone.com 21.
STEPSTONE’S STRATEGY
Hiring need
Candidate
profile
Receipt of
applications Screening &
preselection
Interview
Hire
Employee-
development Selection of
Source
Start search
Employer
Current product portfolio
Candidate journey
Employer journey
www.stepstone.com 22.
STEPSTONE’S STRATEGY
Hiring need
Candidate
profile
Receipt of
applications Screening &
preselection
Interview
Hire
Employee-
development Selection of
Source
Start search
Employer
Current product portfolio
Orientation
Start Job search
Browse jobs
Research employer
Research salary
Application
Interview
Hire
Career
development
Candidate journey
Employer journey Candidate
Current Product portfolio
21.
www.stepstone.com 23.
STEPSTONE’S STRATEGY
Hiring need
Candidate
profile
Receipt of
applications Screening &
preselection
Interview
Hire
Employee-
development Selection of
Source
Start search
Employer
Current product portfolio
Orientation
Start Job search
Browse jobs
Research employer
Research salary
Application
Interview
Hire
Career
development
Candidate journey
Employer journey Candidate
Current Product portfolio
Future Product portfolio
21.
www.stepstone.com 22.
MAJOR CHALLENGE: TO FIND THE PERFECT MATCH
In general there is a high market liquidity.
The challenge is to find the:
PERFECT MATCH
Jobs
24.70
0.65
Job seeker (Unique users) (Listings)
Jobs & audience at StepStone (in million, per month (average 2016))
Ratio:
~40 job seeker for 1 job
www.stepstone.com 23.
EXAMPLE: STEPMATCH - BEING ON TOP OF CORE BUSINESS
Business Intelligence Understanding the content of listings to match with
candidates (based on Multi-lingual ontology)
Recommender Suggestion of jobs without asking based on user data
Text Processing Search functionality that translates any given text into
‘candidate language’
Search & Categories Powering CV and Offer Search for recruiters
StepMatch
Help candidates discover the most relevant jobs.
www.stepstone.com 24.
EXAMPLE: STEPMATCH - BEING ON TOP OF CORE BUSINESS
Candidate Delivery Index (Applications per job ad)
2.4
Monster
5.6
Indeed
11.6
CVLibrary
12.7
Reed
13.3
Jobsite
16.1
Total jobs
18.6
StepStone UK
34.7
Germany¹ United Kingdom²
¹ Source: TNS (Average September 2015 – September 2016, n = 9,408)
² Source: TNS (Average January-June 2016, n = 2,000), equals amount of applications a customer receives in total
Exemplary: Portfolio
sales for top 50
companies
5.3
meine-stadt.de
5.8
Indeed
5.9
6.7
Jobware
7.5
stellen-anzeigen.de
7.7
Monster
7.8
StepStone
24.1
www.stepstone.com 25.
Employer reviews and salary
information
Launched in Ireland in 2015
(Irishjobs) – Number of reviews
double the size of Glassdoor
EXAMPLE: SKYLIGHT – A CANDIDATE CENTRIC PRODUCT
www.stepstone.com 26.
Social and personality fit with
employers, individuals and teams
Tool is available for the ‘broad
mass’ free of charge
Potential provision to every
company in every country
Profile Fit with employers Fit with individuals
and Teams
EXAMPLE: GOOD&CO – A ‘NEW BET’ TO SUSTAIN SUCCESS
www.stepstone.com 27.
EXAMPLE: GOOD&CO – A ‘NEW BET’ TO SUSTAIN SUCCESS
Good&Co analysed top US
tech companies in terms of
innovative capacity
They found Microsoft to be
changing towards a culture of
innovation, while Facebook’s
employees lack in intellectual
curiosity and adventurousness
For Apple and Twitter the
company culture is reflected
in employee perception
Apple
IBM
Microsoft
www.stepstone.com 29.
CAPEX in % of revenue (Comparison of StepStone with other players¹)
INVESTMENTS THAT EXCEED (PURE-PLAY) PLAYERS
11.7
Linkedin Xing
10.5
17.0
24.9
Monster
4.3
6.7
SEEK
Group
6.6 5.8
DHI
3.5 4.9
StepStone
Group
7.7 8.1
Q3 2016 2015
- Product development and innovations are not free of charge – StepStone will continue to keep CAPEX on a level superior to pure-play players
- Only 10% of StepStone’s CAPEX share accounts for investments in IT and office infrastructure – thus, 7%
of revenue directly flows to product & IT development
- Approximately 1/3 of total StepStone staff works in product development & IT in various developing centres around the world
¹ Source: Annual / Quarterly reports
Pure-play players
Conflictory
directions
- Xing & Linkedin have a higher CAPEX share, because they need to invest in several sectors:
• Recruitment
• Social network platform
• Display advertising
• Marketing solutions
• Learning & Development
www.stepstone.com 30.
CONTINUED EBITDA GROWTH IN ABSOLUTE TERMS
StepStone generates best-in-class
EBITDA margins¹
25%
REED Linkedin
9%
DHI
Group
29%
30%
SEEK
Group
37%
StepStone
Group
43%
Except in 2009, StepStone’s EBITDA grew since
2002 – and it will continue to grow >10%
Estimate for Indeed: 15-20%
2016 2018 2017 2019 2020 2021
CAGR: >10%
¹ Source: Annual / Quarterly reports