Randstad (RAND: NV), today reported revenue for the fourth quarter ending 31 December 2019 of €5.9 billion, a decrease of 3% on an organic basis compared with €6.1 billion a year ago.

The staffing giant’s fourth-quarter revenue drop reflected ongoing macro and political uncertainties, primarily in Northern Europe. The Netherlands and Germany reported declining revenue while North America saw revenue fall 2% organically.

Gross profit fell by 2% on an organic basis. Net income was down 15% in the fourth quarter to €167 million while EBITA (adjusted for integration costs and one-offs) fell by 12% to €292 million.

According to Reuters, analysts polled by the company on average had expected adjusted EBITA to drop to €294 million, from 316 million euros in the same quarter a year earlier.

Revenue in the fourth quarter was also a comedown when compared to the €6.00 billion reported in the third quarter ended 30 September 2019.

“Financially, 2019 was a challenging year, but we have been able to demonstrate our resilience once again,” Randstad CEO Jacques van den said. “Randstad's increasingly diversified portfolio by region and activity paid off. Our Group revenue was slightly down year-on-year organically, reflecting ongoing macro and political uncertainties, primarily in Northern Europe. At the same time, we continued our outperformance in several key geographies. Importantly, we were able to further improve our pricing power and discipline, reflecting increasing scarcity in labour markets and the successful implementation of our digital pricing tools globally.”

Revenue by Geography

In North America, permanent (perm) fees were down 1% (Q3 2019: up 4%). In Q4 2019, revenue of the combined US businesses was down 3% (Q3 2019: down 1%). US Staffing/Inhouse Services declined by 5% (Q3 2019: down 4%). US Professionals revenue was up 1% (Q3 2019: up 2%). In Canada, revenue was up 1% (Q3 2019: up 3%).

In France, perm fees were up 4% compared to last year (Q3 2019: up 4%). Staffing/Inhouse Services revenue declined 2% (Q3 2019: down 4%), while the Professionals business was up 10% (Q3 2019: up 9%).

In the Netherlands, revenue was impacted by lower activity in industrial-related sectors. Overall perm fees were down 5% (Q3 2019: down 18%). The combined Staffing and Inhouse Services business was down 11% (Q3 2019: down 6%), while the Professionals business was up 1% (Q3 2019: up 3%).

In Germany, revenue was negatively impacted by regulation changes and challenging macroeconomic conditions. Perm fees were down 34% compared to last year (Q3 2019: down 17%). The combined Staffing/Inhouse Services business was down 16% (Q3 2019: down 17%), while Professionals was down 12% (Q3 2019: down 6%).

In Belgium & Luxembourg, perm fees were flat compared to last year (Q3 2019: down 23%). The Staffing/Inhouse Services business was down 5% (Q3 2019: down 5%).

In Italy, overall perm fees were up 20% (Q3 2019: up 21%).

In Iberia, perm fees were down 5% overall compared to last year (Q3 2019: up 5%). Staffing/Inhouse Services combined was up 1% (Q3 2019: down 1%). Spain was up 4% (Q3 2019: up 1%), while in Portugal revenue was down 6% (Q3 2019: down 8%).

In the UK, revenue was down 2% (Q3 2019: down 2%), while in the Nordics, revenue was down 7% on an organic basis (Q3 2019: down 7%). Revenue in the group’s Swiss business was down 1% YoY (Q3 2019: flat).

In Japan, revenue grew 7% (Q3 2019: up 8%). Revenue in Australia/New Zealand was up 3% (Q3 2019: down 1%), while revenue in China grew by 24% YoY (Q3 2019: up 5%). The group’s business in India was up 13% (Q3 2019: up 19%), while in Latin America revenue grew 23% (Q3 2019: up 21%), primarily driven by Brazil and Mexico. Latin America organic revenue growth not adjusted for hyperinflation accounting in Argentina.

Randstad Sourceright revenue decreased by 1% (Q3 2019: up 6%), while Monster revenue was down by 16% (Q3 2019: down 15%).

Revenue by business line

Randstad also reported revenue for the full year 2019 of €23.6 billion, an organic increase of 2% when compared to 2018.

In January 2020, Randstad reported revenue decreased by 3% to 4%.

Looking ahead, Randstad said Q1 2020 gross margin is expected to be slightly lower sequentially due to seasonality.

“For Q1 2020, we expect slightly lower operating expenses sequentially,” Randstad stated. “There will be a positive 0.9 working day impact in Q1 2020.”

As of last trade, Randstad traded at €52.16, down 0.95% on the day and 7.02% below its 52-week high of €56.10, set on 9 January 2020. Based on its current share price, the company has a market value of €9.65 billion.