Chicago-based international executive recruitment firm Heidrick & Struggles (HSII: NSDQ) yesterday reported revenue for the fourth quarter ending 31 December 2014 of USD 126.5 million, an increase of 3.0% (approx. 5.0% in constant currency) compared with USD 122.9 million during the same period last year.

However, exchange rate fluctuations negatively impacted quarterly revenue by USD 2.7 million. 

General and administrative expenses declined by 4.6%, or USD 1.5 million, positively impacting the company’s fourth quarter operating income. As a percentage of net revenue, general and administrative expenses were 26.5% in Q4 2014, compared with 28.5% in Q4 2013.

Tracy Wolstencroft, Heidrick & Struggles’ President and CEO, commented: “Our fourth quarter and full-year results show year-over-year growth in net revenue, profitability, consultant headcount, and year-end productivity. The results represent solid progress toward many of the initial goals we established when I arrived at Heidrick a year ago; namely to attract and retain exceptional consultant talent, while fostering collaboration and teamwork across our goal platform. We are focused on leveraging what we accomplished in 2014 to deliver unparalleled expertise and service to our clients, accelerate growth, and drive shareholder value.”

On an annual basis, Heidrick & Struggles achieved revenue growth of 6.7% to USD 513.2 million, up from USD 481.0 million in 2013. 

Heidrick & Struggles’ Executive Search and Leadership Consulting (ESLC) business reported revenue growth of 1.7% in Q4 2014 to USD 112.7 million, up from USD 110.8 million in Q4 2013. On an annual basis, revenue rose by 5.1% to USD 459.5 million, compared with 2013.

Specific to Executive Search, the company’s primary business, the number of confirmed searches in Q4 2014 was essentially the same as Q4 2013, while the average revenue per executive search was USD 124,800, up from USD 118,800 a year ago.

On an annual basis, the number of executive searches increased from 3,567 in 2013 to 3,750 last year. The average revenue per executive search was USD 116,000, compared with USD 113,400 in 2013.

The Executive Search and Leadership Consulting business’ geographical revenue breakdown was as follows:

In addition to ESLC, Heidrick and Struggles also operates a business, Culture Shaping, which works with companies to change the behaviour of individuals and teams. The business, which was acquired in January 2013, achieved revenue growth of 18.6% in Q4 2014, compared with the same period last year. Annual revenue reported a strong increase of 40.2%, as a result of increased volumes.  

Looking forward to Q1 2015, Heidrick & Struggles expects to achieve net revenue of between USD 108 million and USD 118 million.

Mr Wolstencroft added: “We are optimistic about the outlook for our business in 2015. Our priorities are to deploy capital to attract and retain the best consultants in the world, while continuing to invest in service offers that enable Heidrick & Struggles to provide increasing value to our clients as a fully integrated leadership advisory firm. We believe we are in a stronger position today to drive revenue growth, improve market share, and increase profitability.”

In trading yesterday, the company’s share price closed up 4.5% at USD 24.61, an increase of 45.2% compared with a year ago. Based on its current share price, the company has a market value of USD 449.0 million.