US-based international executive recruitment firm Heidrick & Struggles (HSII: NSQD) yesterday reported revenue for the fourth quarter ending 31 December 2016 of USD 159.8 million, an increase of 14.0%, in constant currency, compared with USD 144.5 million during the same period last year. 

Reflecting the growing contribution to the company’s business operations and financial performance, the company started reporting its Leadership Consulting business as a separate segment in the fourth quarter. Prior to the fourth quarter, Executive Search and Leadership Consulting had been reported as one business line. Executive Search is being reported by three regional segments, and the reporting of Culture Shaping remains unchanged.

“We finished 2016 with solid fourth quarter results that reflect a return on the strategic investments we have made in the business over the last year,” Tracy Wolstencroft, Heidrick & Struggles President and Chief Executive Officer, said. “Executive Search net revenue increased 6.3% in the fourth quarter, with gains in all three regions. Our Leadership Consulting business has grown increasingly more significant in our portfolio of advisory services as well as to our financial results. Five of our top 10 clients in 2016 utilized Heidrick & Struggles for both Executive Search and Leadership Consulting. Leadership Consulting revenue was $15.6 million in the fourth quarter and the operating margin was 28.3%.”

The company also reported results for the full year ended 31 December 2016 with consolidated net revenue of USD 582.4 million from $531.1 million in 2015, an increase of 11.8% in constant currency.

“We are pleased with what the firm achieved in 2016, both operationally and financially,” Wolstencroft said. “We strategically invested in the growth of all three of our businesses through a combination of acquisitions and new hires, while maintaining profitability. Our clients’ need for visionary leadership, differentiating talent and thriving culture truly has never been greater, and Heidrick & Struggles’ brand and impact has never been stronger. We are well positioned to continue our momentum in 2017 on both the top and bottom lines.”

The company is forecasting first quarter 2017 consolidated net revenue of between USD 140 million and USD 150 million. This forecast is based on the average currency rates in December 2016 and reflects, among other factors, management’s assumptions for the anticipated volume of new Executive Search confirmations, Leadership Consulting assignments and Culture Shaping services, the current backlog, consultant productivity, consultant retention, and the seasonality of its business.

In trading yesterday, Heidrick & Struggles closed at USD 21.45, down 0.23% on the day and 14.83% below its 52-week high of USD 25.19, set on 3 March 2016.