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View All NewsRandstad Q2 up organically bolstered by Europe, rest of world; US revenue rises 2%
Randstad NV reported second-quarter revenue rose 5% on an organic basis — which excludes the impact of acquisitions, divestitures and currency. One of the company’s fastest-growing geographies was Italy where revenue rose 10% on an organic basis. In North America, revenue rose just 2% organically.
US revenue was up 2% on an organic basis with staffing/inhouse served revenue rising by 5% and professionals revenue falling 1%. In Canada, revenue was flat.
The company also reported that revenue in its “rest of world” segment rose 11% on an organic basis. This includes Australia, New Zealand, Japan, China and Latin America. The company’s Randstad Sourceright Division, which provides MSP and RPO services, posted double-digit revenue growth. However, revenue at Monster was down 16% on an organic basis.
| (€millions) | Q2 2018 | Q2 2017 | % change | % organic change | Q2 2018 (US$millions) |
| Revenue | € 6,022 | € 5,866 | 3% | 5% | $7,014 |
| Gross profit | € 1,191 | € 1,194 | 0% | 3% | $1,387 |
| Gross margin | 19.8% | 20.4% | |||
| Operating profit | € 238 | € 213 | 12% | - | $277 |
| Net income | € 193 | € 152 | 27% | - | $225 |
Gross margin narrowed in the second quarter. Temporary staffing had a negative effect of 30 basis-points on gross margin based on mix of business and changes in French tax law. Monster and foreign exchange also had a negative impact on gross margin.
Quote
“Sourceright, great quarter,” CEO Jacques van den Broek said in a conference call with analysts. “We are now above €1 billion of managed spend in the quarter.”
Revenue by geography
| (€millions) | Q2 2018 | Q2 2017 | % change | % organic change | Q2 2018 (US$millions) |
| North America | € 1,027 | € 1,084 | -5% | 2% | $1,196 |
| Netherlands | € 863 | € 830 | 4% | 4% | $1,005 |
| France | € 975 | € 944 | 3% | 3% | $1,136 |
| Germany | € 616 | € 568 | 8% | 6% | $718 |
| Belgium & Luxembourg | € 410 | € 383 | 7% | 7% | $478 |
| Italy | € 427 | € 384 | 11% | 10% | $497 |
| Iberia | € 375 | € 357 | 5% | 3% | $437 |
| Other European countries | € 553 | € 529 | 5% | 6% | $644 |
| Rest of the world | € 489 | € 487 | 0% | 11% | $570 |
| Global Businesses | € 287 | € 300 | -4% | 3% | $334 |
Randstad’s global business segment includes Randstad Sourceright and Monster. In a conference call with analysts, the company reported it’s forecasting that Monster will have a €5 million to €10 million loss for the year. However, the company said Monster remains stable on the top line, and it’s planning a new tool for Monster to roll out this year in the US.
By business line for the full company, inhouse services posted the fastest growth, rising 12% on an organic basis.
Revenue by business line
| (€millions) | Q2 2018 | Q2 2017 | % change | % organic change | Q2 2018 (US$millions) |
| Staffing | € 3,157 | € 3,080 | 3% | 2% | $3,677 |
| Inhouse Services | € 1,351 | € 1,285 | 5% | 12% | $1,574 |
| Professionals | € 1,227 | € 1,201 | 2% | 5% | $1,429 |
Guidance
Development of volumes in early July indicates a continuation of the second-quarter growth rate of 5% on an organic basis. However, third-quarter gross margin is expected to be slightly lower sequentially given seasonality.
Share price and market cap
Shares in Randstad closed up 3.92% to €53.00 in Amsterdam. The company had a market cap of €9.70 billion.