Randstad (RAND: NV) today reported revenue for the third quarter ending 30 September 2019 of €6.00 billion, down 2.5% on an organic basis compared with a year ago. While growth was robust in Rest of the World, the group said its declining top line in Europe stabilised, while growth in the US slightly eased, with both of these regions impacted by macro uncertainty.

Underlying EBITA stood at €298, up 4% on an organic basis. According to Reuters, analysts polled by Randstad had on average forecast EBITA of €291 million. Currency effects had a €3 million positive impact, year-on-year on EBITA. The EBITA margin reached 5.0%, down from 5.1% the year before.Overall, permanent fees declined by 1% which was a slowdown from the 2% growth in the second quarter.

CEO Jacques van den Broek commented, “Our strong gross margin and balanced cost management were able to offset slightly negative organic revenue growth in Q3 2019, while generating record high quarterly free cash flow.”

“We continue to gain market share in several countries, in part driven by the successful progression of our digital strategy across the world. We experienced ongoing weakness in industrial-related sectors, while still identifying ample growth opportunities globally. This means that we continue to balance selective investments for the longer term, while managing more challenging markets,” van den Broek said.

During the period Randstad also announced that Supervisory Board proposed the nomination of René Steenvoorden as Chief Digital Officer and a member of the Executive Board.

Revenue by Geography

In North America, revenue was down 1% on an organic basis. Permanent fees were up 4% but US Staffing/Inhouse Services declined by 4%. US Professionals revenue was up 2%. In Canada, revenue was up 3%.

In France, revenue was down 1% on an organic basis, but ahead of the market. Permanent fees were up 4% compared to last year but Staffing/Inhouse Services revenue declined 4%. The Professionals business was up 9%, driven by Ausy and healthcare.

In the Netherlands, revenue was down 5% on an organic basis, impacted by lower activity in the automotive sector. Overall permanent fees were down 18%. The Staffing and Inhouse Services businesses was down 6% while the Professionals business was up 3%.

In Germany, revenue was down 14% on an organic basis, still negatively impacted by regulation changes, weakness in the automotive sector and challenging macroeconomic conditions. Permanent fees were down 17% compared to last year. The combined Staffing/Inhouse Services business was down 17%, while Professionals was down 6%.

In Belgium & Luxembourg, revenue was down 4%. Permanent fees were down 23% compared to last year. The Staffing/Inhouse Services business was down 5%.

Revenue per working day in Italy was down 2% on an organic basis compared to the prior year, impacted by subdued macroeconomic trends.

In Iberia, revenue was down 1% on an organic basis. Permanent fees were up 5% compared to last year. Staffing/Inhouse Services combined was down 1%. Spain was up 1% while Randstad said the focus on permanent placements (up 6%) continues to pay off. In Portugal, revenue was down 8%.

Across 'Other European countries', revenue was down 1% on an organic basis. In the UK, revenue was down 2% while in the Nordics, revenue was down 7%, on an organic basis. Revenue in the Swiss business was stable.

Overall revenue in the 'Rest of the world' region grew by 7% organically. In Japan, revenue grew 8%. Revenue in Australia/New Zealand was down 1%, while revenue in China grew by 5%. Randstad’s business in India was up 19% while in Latin America revenue grew 21%, primarily driven by Brazil and Mexico.

Overall organic revenue growth in the global business was down 1% on an organic basis. Randstad Sourceright revenue increased by 6%, while Monster revenue was down by 15%. Monster continues to face restructuring efforts and the company stated that, as a result, they expected Monster to be profitable in Q4 2019.

Revenue by business line

Randstad also reported that revenue declined at a similar pace in September 2019. It added that the development of volumes in early October indicate a continuation of the Q3 2019 growth trend. Q4 2019 gross margin is expected to be slightly lower sequentially. For Q4 2019, Randstad expects broadly stable operating expenses sequentially.

As of last trade Randstad traded at €46.72, down 1.72% on the day and 10.40% below its 52-week high of €52.14, set on 24 April 2019. Based on its current share price the company has a market value of €8.71 billion.