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View All NewsWorld – Heidrick & Struggles H1 2015 results in Europe disappointing
Chicago-based international executive recruitment firm Heidrick & Struggles (HSII: NSQD) yesterday reported revenue for the second quarter ending 30 June 2015 of USD 133 million, a decrease of 2.3% compared with USD 136.1 million during the same period last year.
Q2 2015 | Q2 2014 | Change | |
Revenue | USD 133 million | USD 136.1 million | -2.3% |
Operating Income | USD 9.2 million | USD 12.5 million | -26.4% |
Net income | USD 5 million | USD 3.8 million | +3.2% |
The company advised that exchange rate fluctuations negatively impacted results by USD 6.9 million, or approximately 5%.
Furthermore, general and administrative expenses increased by 5.5%, or USD 1.7 million, impacting the company’s second quarter operating income. As a percentage of net revenue, general and administrative expenses were 24.9% in Q2 2015 compared with 23.1% in Q2 2014.
Tracy R. Wolstencroft, President and CEO of Heidrick & Struggles, commented: "On a constant currency basis, net revenue in the Americas grew 9% and in Asia Pacific grew almost 7%. Results from Europe were disappointing, with a decline in revenue that was doubled by the negative impact of currency fluctuations. Improving our business in Europe is a high management priority."
For the six months ended 30 June 2015, the company reported revenue of USD 248.2 million, an increase of +0.4% compared with USD 247.2 million during the same period last year.
H1 2015 | H1 2014 | Change | |
Revenue | USD 248.2 million | USD 247.2 million | +0.4% |
Operating Income | USD 15.8 million | USD 13.3 million | -18.7% |
Net income | USD 8.4 million | USD 3 million | +180% |
Heidrick & Struggles operates two businesses: Executive Search & Leadership Consulting (ESLC) and Culture Shaping, which works with businesses to change the behaviour of individuals and teams.
In the first six months of 2015 Executive Search and Leadership Consulting net revenue was $231.7 million, essentially unchanged from $231.3 million in the first six months of 2014. Exchange rate fluctuations negatively impacted results by $11.6 million, or 5%. Revenue growth in the Americas of 9.6% (approximately +11% on a constant currency basis) and in Asia Pacific of 4.0% (approximately +11% on a constant currency basis) was mostly offset by a decline in Europe of 23.8% (approximately -12% on a constant currency basis). From a global practices perspective, growth in the Financial Services, Healthcare & Life Sciences and Industrial practices was mostly offset by declines in the other practices.
In the first six months of 2015 Net revenue from Culture Shaping services increased by 3.9% to $16.5 million, compared with $15.9 million in the same period in 2014. Exchange rate fluctuations negatively impacted net revenue by $0.2 million, or about 1%.
Looking forward to the third quarter, Heidrick & Struggles expects to achieve net revenue of between USD 130 million and USD 140 million. The forecast is based on the average currency rates in June 2015 and reflects, among other things, management’s assumptions for the anticipated volume on new Executive Search confirmation, Leadership Consulting assignment, and Culture Shaping services.
Mr Wolstencroft added: “We continue to grow and improve the talent base within our firm. We are investing capital to fill targeted industry practice and geographic gaps in order to provide increasing value to our clients as a trusted leadership advisory firm."
In trading yesterday, the company’s share price closed down 4.9% at USD 22.51, an increase of 25.3% compared with a year ago. Based on its current share price, the company has a market value of USD 433.4 million.