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View All NewsRandstad Q3 revenue falls 2.5% with US down; sluggish auto sector impacts growth
US revenue growth eased in the third quarter while European growth stabilized, Randstad nv reported today in its Q3 earnings release.
Third-quarter revenue fell 2.5% year over year on an organic basis at the Netherlands-based staffing giant. In comparison, revenue had fallen 1.7% year over year in the second quarter.
Growth in the third quarter was tough to come by, CEO Jacques van den Broek said in a video presentation.
“The automotive sector is still very sluggish and it shows in our numbers,” van den Broek said. “Nevertheless, we took market share in Italy, France, Spain and Germany.”
Gross margin improved.
| (€millions) | Q3 2019 | Q3 2018 | % change | % organic change* | Q3 2019 (US$millions) |
| Revenue | € 6,006 | € 6,006 | 0% | -2.5% | $6,569 |
| Gross profit | € 1,204 | € 1,191 | 1% | - | $1,317 |
| Gross margin | 20.1% | 19.8% | - | - | - |
| Operating profit | € 203 | € 260 | -22% | - | $222 |
| Net income | € 140 | € 190 | -26% | - | $153 |
US revenue fell 1% year over year on an organic basis in the third quarter; it had risen 1% year over year in the second quarter. However, Canadian revenue rose 3% organically in the third quarter, up from 1% growth in the second.
In Europe, revenue fell 4% on an organic basis in the third quarter; it had also fallen by 4% in Q2.
Growth in both the US and Europe were impacted by economic uncertainty, according to the company.
Revenue in Randstad Sourceright, which includes MSP and RPO services, rose 6% year over year on an organic basis in the third quarter. Monster revenue fell 15% on an organic basis in Q3 after falling 16% in the second quarter. Randstad Sourceright and Monster are included in Randstad’s “global businesses” segment.
Randstad noted €62 million in one-off costs that include restructuring costs at Monster and a one-time settlement related to the transfer of a Dutch pension plan. The third quarter of last year had one-off costs of €16 million.
Revenue by geography
| (€millions) | Q3 2019 | Q3 2018 | % change | % organic change* | Q3 2019 (US$millions) |
| North America | € 1,113 | € 1,057 | 5% | -1% | $1,217 |
| France | € 941 | € 934 | 1% | -1% | $1,029 |
| Netherlands | € 834 | € 862 | -3% | -5% | $912 |
| Germany | € 532 | € 610 | -13% | -14% | $582 |
| Belgium & Luxembourg | € 428 | € 440 | -3% | -4% | $468 |
| Italy | € 403 | € 403 | 0% | -2% | $441 |
| Iberia | € 381 | € 380 | 0% | -1% | $417 |
| Other European countries | € 548 | € 547 | 0% | -1% | $599 |
| Rest of the world** | € 535 | € 491 | 9% | 7% | $585 |
| Global businesses | € 291 | € 282 | 3% | -1% | $318 |
Japanese revenue rose 8% in the third quarter after rising by 9% in the second quarter, Randstad noted. However, Australia and New Zealand revenue fell by 1% in the third quarter and 2% in Q2.
Revenue by business line
| (€millions) | Q3 2019 | Q3 2018 | % change | % organic change* | Q3 2019 (US$millions) |
| Staffing | € 3,077 | € 3,160 | -3% | -5% | $3,365 |
| Inhouse Services | € 1,337 | € 1,330 | 1% | -2% | $1,462 |
| Professionals | € 1,301 | € 1,234 | 5% | 2% | $1,423 |
| Global businesses | € 291 | € 282 | 3% | -1% | $318 |
Permanent placement fees fell by 1% in the third quarter after rising by 2% in Q2. However, perm fees in North America were up 4% in the third quarter after rising 6% in the second.
The company also announced that René Steenvoorden was being promoted to serve on its executive board as chief digital officer.
Share price and market cap
Shares in Randstad closed up 0.38% to €47.72; the company had a market cap of €8.71 billion, according to FT.com.
Other
*Organic change excludes the impact of currencies, acquisitions, disposals, reclassifications and, for revenue, adjustment for number of working days.
**The company’s “rest of the world” segment includes Australia, New Zealand, Japan, China and Latin America.