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World – Heidrick & Struggles’ revenue boosted by European growth

30 July 2014

Chicago-based international executive recruitment firm Heidrick & Struggles (HSII: NSQD) yesterday reported revenue of USD 141 million for the second quarter ending 30 June 2014, an increase of +10.7% compared with USD 127.3 million a year ago.

The company reported an operating income of USD 12.5 million, an increase of +117.9% compared with USD 5.7 million in Q2 2013. Net income for the quarter was USD 3.8 million, a year-on-year increase of +100% from USD 1.9 million last year.

Tracy R. Wolstencroft, President and Chief Executive Officer of Heidrick & Struggles, commented: “Our second quarter results reflect year-over-year and sequential improvements in almost all of our operating segments and key metrics. We are encouraged by the progress and by the continued growth in our consultant base since the beginning of the year. At the same time, we recognise there is still much work to be done to deliver a fully integrated service platform to our clients and to improve our financial performance.”

Revenue from the company’s Executive Search and Leadership Consulting business increased by +8.7% to USD 126.7 million during Q2 2014, up from USD 116.6 million a year ago.

Broken down geographically, the Americas remains the largest division of the company’s Executive Search and Leadership Consulting business. Revenue from the region increased, year-on-year, by +3.4%, rising to USD 70.5 million from USD 68.2 million in Q2 2013. Operating income across the Americas increased by +0.4% to USD 19.2 million during the period, up from USD 19.1 million last year.

The strongest revenue growth was reported across Europe, which grew by +34% to USD 31.2 million, up from USD 25.1 million a year ago. Heidrick & Struggles’ European business reported an operating income of USD 1.7 million for Q2 2014, an improvement against an operating loss of USD 2.3 million a year ago. 

A small decline of -0.3% in revenue was reported across Asia Pacific, which fell to USD 25.06 million from USD 25.1 million, year-on-year. The region also reported a small decline of -0.8% in operating profit, falling to USD 2.92 million from USD 2.94 million, year-on-year.

In January 2013, Heidrick & Struggles acquired Senn-Delaney Leadership Consulting Group. The function of the business is to provide corporate culture shaping services, which includes changing the behaviour of individuals and teams. During the second quarter the Culture Shaping division reported revenue of USD 9.4 million, a year-on-year increase of +71.9% from USD 5.4 million in 2013. The division reported an operating income of USD 1.3 million for the quarter, an improvement against an operating loss of USD 1.2 million last year.

Looking forward, the company expects to achieve revenue during Q3 2014 of between USD 123 million and USD 133 million.

Mr Wolstencroft added: “Our year-to-date results provide a stable foundation to pursue our growth strategy as a fully integrated leadership solutions provider. We are committed to investing in our people and in our client relationships in order to grow revenue and enhance shareholder value.”

In trading yesterday, the company’s share price closed up by +4.8% at USD 18.83, an increase of +28.2% compared with a year ago. Based on its current share price, the company has a market value of USD 343.3 million.