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Randstad North American revenue falls 2% on organic basis

February 20 2014

Randstad Holding NV, the world’s second-largest staffing firm, reported North American revenue fell 2 percent on an organic basis in the fourth quarter to €916.5 million (US$1.26 billion) when compared to the same period in the previous year.

Organic growth excludes the impact of currencies, acquisitions, disposals and reclassifications. Randstad also adjusted organic revenue growth by number of working days. North American revenue fell 8 percent when not measured organically.

Randstad reported revenue in its North America staffing segment fell by 10 percent in the fourth quarter because of transfers to its inhouse business line. The company also reported it terminated some contracts because of its stronger focus on profitability.

On the other hand, fourth-quarter revenue rose 15 percent in the company’s inhouse services segment, which mainly focuses on industrial and logistics clients because of the transfers from staffing and a promising start of its inhouse services business in Canada.

Randstad reported revenue was flat in its North American professional staffing segment. Looking at the U.S. professionals segment alone, revenue fell 1 percent per working day. Information technology staffing revenue returned to growth in the U.S., the company said. It also reported its IT solutions business performed well, but its finance business remained weak.

Randstad Sourceright had good performance in recruitment process outsourcing, the company reported, but added that RPO performance was more than offset by lower revenue in payroll services.

Looking at global results, fourth-quarter revenue rose 2 percent on an organic basis to €4.28 billion (US$5.89 billion). It was up 1 percent when not calculated organically.

Randstad’s fourth-quarter gross margin improved to 18.4 percent from 18.2 percent in the year-ago quarter.

“Growth continued throughout the fourth quarter of 2013, confirming a gradual recovery,” said CEO Ben Noteboom. “Our increased investments in marketing have been well-timed, boosting brand awareness and preference, and strengthening our sales capabilities to benefit from growth opportunities.”

Shares in Randstad fell 10.52 percent.

Noteboom will step down as CEO and chairman of the world’s second-largest staffing firm Feb. 28; he will be replaced by Jacques van den Broek.

Fourth-quarter net income was €54.1 million (US$74.5 million) compared to a net loss of €97.4 million in the fourth quarter of last year.

For the full year, revenue fell 1 percent on an organic basis to €16.57 billion (US$22.81 billion). It fell 3 percent when not calculated organically.

Full-year 2013 net income was €230.7 million compared to net income of €36.7 million in 2012.

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