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View All NewsWorld – European business softens Kelly Services Q2 Revenue
US recruitment firm Kelly Services Inc. (NASD: KELYA) yesterday reported revenue for the second quarter ending 30 June 2016 of $1.4 billion, a decrease of 0.7% but an increase of 0.6% in constant currency.
| (US$ millions) | Q2 2016 | Q2 2015 | Change | Constant Currency |
| Revenue | $1,375.5 | $1,385.0 | (0.7%) | 0.6% |
| Gross profit | $230.5 | $222.3 | 3.7% | 4.8% |
| Gross margin | 16.8% | 16.1% | N/A | N/A |
| Net earnings | $8.9 | $6.8 | 30.2% | N/A |
“We are pleased with Kelly’s ability to deliver strategic growth, improve gross profit, and increase shareholder value in the second quarter,” president and CEO Carl Camden said. “The finalization of our Joint Venture in APAC positions us for growth in staffing-related services while enabling us to accelerate investments in OCG, which remains a Kelly-owned entity.”
Kelly Services and Japanese staffing giant, Temp Holdings ,closed on the TS Kelly Asia Pacific joint venture on 4 July 2016, forming what Kelly expects to be one of the region’s largest workforce solutions providers.
Revenue by geography is as follows:
| (US$ millions) | Q2 2016 | Q2 2015 | % change | % constant currency |
| Americas | ||||
| United States | $930.8 | $923.6 | 0.8% | 0.8% |
| Canada | $35.8 | $41.6 | -14.1% | -10.6% |
| Mexico | $25.4 | $32.0 | -20.2% | -5.5% |
| Puerto Rico | $22.5 | $26.6 | -15.3% | -15.3% |
| Brazil | $10.2 | $9.9 | 3.8% | 20.6% |
| Europe, Middle East and Africa | ||||
| France | $61.3 | $60.9 | 0.7% | -1.2% |
| Switzerland | $54.6 | $54.6 | -0.1% | 3.0% |
| Portugal | $38.7 | $33.9 | 14.5% | 12.1% |
| United Kingdom | $23.1 | $27.1 | -15.0% | -9.2% |
| Russia | $16.6 | $22.2 | -25.3% | -6.8% |
| Germany | $15.7 | $14.3 | 9.2% | 7.0% |
| Italy | $15.1 | $13.0 | 16.0% | 13.9% |
| Norway | $8.4 | $10.0 | -15.6% | -10.0% |
| Other EMEA | $14.8 | $10.3 | 44.3% | 42.2% |
| Asia Pacific | ||||
| Singapore | $33.0 | $33.0 | 0.2% | 1.3% |
| Australia | $32.1 | $32.9 | -2.3% | 2.0% |
| Malaysia | $14.5 | $15.9 | -9.6% | -0.8% |
| New Zealand | $9.5 | $10.3 | -7.7% | -1.9% |
| Other Asia Pacific | $13.4 | $12.9 | 3.7% | 8.6% |
Kelly Services operates three business segments, of which the Commercial and Professional & Technical staffing segments are broken down regionally in the chart below. Kelly’s outsourcing and consulting business, KellyOCG, grew 5.9% globally but does not provide a geographical breakdown of results. Kelly OCG’s services include recruitment process outsourcing (RPO), contingent workforce outsourcing (CWO), business process outsourcing (BPO), payroll process outsourcing (PPO), executive placement and outplacement.
| (US$ millions) | Q2 2016 | Q2 2015 | % change | % constant currency |
| Americas Commercial | $635.3 | $651.3 | -2.5% | -1.3% |
| Americas Professional & Technical | $241.6 | $246.2 | -1.9% | -1.7% |
| EMEA Commercial | $197.1 | $195.7 | 0.8% | 3.0% |
| EMEA Professional & Technical | $43.1 | $42.9 | 0.5% | 2.2% |
| APAC Commercial | $87.9 | $90.3 | -2.6% | 1.6% |
| APAC Professional & Technical | $9.2 | $10.3 | -11.4% | -7.8% |
| KellyOCG | $173.9 | $165.0 | 5.4% | 5.9% |
Kelly Services forecast third-quarter revenue will fall between 3% and 4% year over year in constant currency. Excluding the impact of the APAC joint venture, revenue in the company will rise 1.5% to 2.5% in constant currency.
On Wednesday, Kelly Services Inc shares closed at $19.07, down sharply by 8.09% on the day and 9.10% below its 52-week high of 20.98, set on 25 July 2016. Based on its current share price the company has a market value of $786.54 million.