Randstad (RAND: NV), today reported revenue for the first quarter ending 31 March 2019 of €5.7 billion, a marginal increase of 0.5% on an organic basis compared with €5.6 billion a year ago.

The group reported a slight rebound in Europe after a fourth quarter which saw slowing activity in European markets. Randstad also cited robust growth in Rest of the World and North America in the first quarter. The company’s prediction that slower growth in the second half of 2018 was a pause rather than the start of a recession seems to be holding up.

Gross profit amounted to €1.1 billion, up 0.6% organically.

EBITA rose by 1% on an organic basis to € 227 million with currency effects having a €3 million positive impact, year-on-year. The company cited a better pricing environment, permanent fee growth and good cost control as well as crediting its digital strategy and, in particular its pricing tools, for further driving productivity and profitability. The market was positively surprised as analysts polled by Reuters had, on average, expected a lower EBITA of €207 million, down from €217 a year earlier.

Permanent fees grew by 5%, with Europe up 7%, and North America flat. In the 'Rest of the world' region, permanent fee growth amounted to 8%. Permanent fees made up 11.5% of Randstad’s total gross profit.

"Our Q1 2019 results marked a strong start to the year, as improving gross margins and agile cost management fuelled further EBITA margin progression," CEO Jacques van den Broek said.

"Our organic revenue growth stabilised at a positive level, with market share gains in the Netherlands, Belgium and Germany, while growth in France returned to market level. Our strong regional diversification continued to pay off, as Japan, Australia, India and the Latin America region delivered significant contributions to our growth and profitability,” van den Broek said.

Revenue by Geography was broken down as follows.

In North America, permanent fees were flat in Q1 2019. Revenue for the group’s combined US businesses was up 3%. US Staffing/Inhouse Services grew by 3%. US Professionals revenue was up 2%. However, in Canada, revenue was down 2%.

In France, organic revenue growth was flat, which the company believes is back in line with market trends. Permanent fees were up 9% compared to last year. Staffing/Inhouse Services revenue declined 3%. The Professionals business was up 9% driven by Ausy (IT solutions/consultancy) and healthcare.

In the Netherlands, organic revenue was up 1% and above the market. Overall, permanent fees were up 20%. The Staffing and Inhouse Services businesses was flat, while the Professionals business was up 7%.

In Germany, organic revenue was down 10%, but ahead of market, negatively impacted by regulation changes and lower activity in the automotive sector. Permanent fees were down 3% compared to last year. The combined Staffing/Inhouse Services business was down 13%, while Professionals was down 1%.

In Belgium & Luxembourg, organic revenue was up 1%, still ahead of the market. Permanent fees were flat compared to last year. The Staffing/Inhouse Services business was up 1%.

In Italy, organic revenue was up 1% compared to the prior year, still impacted by subdued macroeconomic trends. Overall permanent fees were up 29%.

In Iberia, organic revenue was stable. Permanent fees were up 14% compared to last year. Staffing/Inhouse Services combined was flat. Spain was up 3% with permanent placements up 17%. In Portugal, revenue was down 6%.

Across 'Other European countries', organic revenue was flat. In the UK, revenue was up by 3%, while in the Nordics, revenue was down 10% on an organic basis. Revenue in the Swiss business was up 2%.

Overall revenue in the 'Rest of the world' region grew by 10% organically. In Japan, revenue grew 5%. Revenue in Australia/New Zealand grew 5%, while revenue in China grew by 12%. The group’s business in India was up 21%, while in Latin America revenue grew 24%, driven by Argentina and Brazil.

For Randstad’s Global Business, overall organic revenue growth per working day was up 4%. Randstad Sourceright revenue increased by 13%, while Monster continued its downward trajectory with a decline of 17%. Nevertheless, profit decline at the EBITA level for the Global Business division eased to -1.8% compared to -2.5% last year, reflecting improved results at both Sourceright and Monster.

Revenue by business line was broken down as follows.

In March 2019, revenue increased at a similar pace to the first quarter of 2019. Randstad said the development of volumes in early April indicate a continuation of the Q1 2019 trend. Looking ahead, the company said Q2 2019 gross margin is expected to be slightly higher sequentially. There will also be an adverse 0.3 working day impact in Q2 2019.

“For Q2 2019, we expect slightly higher operating expenses sequentially given seasonality,” the company stated. As of last trade Randstad traded at €51.40, up 3.88% on the day and 6.85% below its 52-week high of 55.18, set on 28 Aug 2018. Based on its current share price the company has a market value of €9.07 billion.