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View All NewsWorld – Heidrick & Struggles Q2 net revenue hit by weakness in consulting and executive search
Net revenue declined at Heidrick & Struggles International Inc. (NASD: HSII) in the second quarter to $173.1, down 5.4% and 3.6% on constant currency basis compared to the 2018 second quarter which the group said had an unusually high number of revenue upticks.
| ($ millions) | Q2 2019 | Q2 2018 | Change | Constant Currency |
| Net Revenue | 173.1 | 183.1 | -5.4% | -3.6% |
| Reimbursements | 5.0 | 4.6 | 9.1% | N/A |
| Total Revenue | 178.1 | 187.7 | -5.1% | N/A |
| Operating Income | 18.3 | 18.4 | N/A | 0.6% |
| Net Income | 14.3 | 11.4 | 24.5% | N/A |
Net Revenue by segment and geography was as follows.
| ($ millions) | Q2 2019 | Q2 2018 | Change | Constant Currency |
| Executive Search | ||||
| Americas | 100.5 | 102.7 | -2.1% | N/A |
| Europe | 34.8 | 37.3 | -6.5% | -1.0% |
| Asia Pacific | 23.1 | 26.5 | -12.6% | -9.4% |
| Total Executive Search | 158.5 | 166.5 | -4.8% | -2.9% |
| Heidrick Consulting | 14.5 | 16.5 | -12.0% | -9.8% |
Within Executive Search all regions showed a decrease in net revenue. All industry practice groups within Executive Search saw a reduction in billings except for the Healthcare & Life Sciences practice.
Within Heidrick Consulting, the decline in revenue reflected lower productivity and the timing of project engagements.
Heidrick & Struggle also reported revenue for the six months ended 30 June 2019 with net revenue of $344.7 million, up 0.5% and 2.7% in constant currency, from $343.1 million in the first six months of 2018.
“We are pleased with second quarter and year-to-date results,” Heidrick & Struggles’ President and CEO, Krishnan Rajagopalan said. “We are running just as hard as we did in 2018, a record year, and are still seeing solid market conditions, even with the geographic variability. Moreover, we are operating the business more efficiently and delivering continued improvements in profitability, net income and EPS (earnings per share). We are executing on our 2019 initiatives, focused on delivering a fully integrated, premium service offering to our clients, and believe we are in a strong position to capitalize on current market demand.”
Looking ahead, the company expects 2019 third quarter consolidated net revenue of between $175 million and $185 million. The outlook is based on the average currency rates in June 2019 and reflects, among other factors, management’s assumptions for the anticipated volume of new Executive Search confirmations, Heidrick Consulting assignments, the current backlog, consultant productivity, consultant retention, and the seasonality of its business.
In trading yesterday Heidrick & Struggles International shares closed at $30.48, down 0.72% on the day and 7.89% above its 52-week low of $28.25, set on 23 October 2018. Based on its current share price the company has a market value of $582.72 million.