Randstad (RAND: NV), the world’s largest staffing firm, today reported revenue for the fourth quarter ending 31 December 2021 of €6.75 billion, an increase of 16.3% on an organic basis compared with €5.69 billion a year ago. On a reported basis, revenue was up 18.6%, of which working days had a positive impact of 0.1% effect while currency effects had a positive effect of 1.7%. M&A contributed 0.5%.

Group revenue was up 12% vs Q4 2019 (pre-pandemic) which Randstad claimed was underpinned by the strength of its portfolio. Underlying EBITA increased organically by 25%. Underlying EBITDA stood at €335 million, comfortably ahead of the forecast of €322 million from a Reuters-compiled poll of 12 analysts.

CEO Jacques van den Broek, said, “We delivered strong sector and regional performances across our portfolio, with market outperformance in the majority of our markets and significant growth in Perm and RPO.”

“Talent scarcity and mismatches in the labour market remain the biggest challenges for our clients and we see that the traditional recruitment process is changing,” van den Broek said. “However, by combining our advancing digital capabilities, with our data and passion for people, we continue to be able to meet demand and find the right talent for our clients at pace. We will continue to focus on seeing the possible in people, empowering them to realize their full potential.”

In an investor relations webcast, van den Broek said, “We can look back on the year and be proud of what we have accomplished. With the Covid-19 pandemic far from over, but certainly more manageable, we have demonstrated that our industry, and Randstad in particular, is resilient and more relevant than ever.”

Revenue by Geography

Across North America, permanent placement fees were up 87% year-on-year. In Q4 2021, revenue of the combined US businesses was up 12%. US Staffing/Inhouse Services grew by 11%. US Professionals revenue was up 14% over the year. In Canada, revenue was up 28%.

In France, revenue was up 10% and up 2% compared to Q4 2019. Permanent placement fees were up 13% compared to last year. Staffing/Inhouse Services revenue was up 9%. The Professionals business was up 13%.

In the Netherlands, revenue was up 16% and up 9% compared to Q4 2019. Overall permanent placement fees were up 58%. The combined Staffing and Inhouse Services business was up 15% while the Professionals business was up 19%.

In Germany, revenue per working day was up 15% and up 9% compared to Q4 2019. Permanent placement fees were up 79% compared to last year. The combined Staffing/Inhouse Services business was up 20%, while Professionals was down 7%.

In Italy, revenue per working day in Italy was up 32% over the year and up 32% compared to Q4 2019. Overall permanent placement fees were up 77%.

In Belgium & Luxembourg, revenue was up 7% and up 4% compared to Q4 2019. The Staffing/Inhouse Services business was up 10%.

Within Iberia, revenue per working day was up 15% and up 10% compared to Q4 2019. Permanent placement fees were up 104% compared to last year. Staffing/Inhouse Services combined was up 14%. Spain was up 23% while in Portugal revenue was down 7%.

Across 'Other European countries', revenue per working day was up 13% and up 8% compared to Q4 2019.

In the UK, revenue was up 36% while in the Nordics, revenue was up 20% on an organic basis. Revenue in the Swiss business was down 1%.

Total revenue in the 'Rest of the world' region increased by 20% organically over the year and by 19% compared to Q4 2019.

In Japan, revenue grew 13%. Revenue in Australia/New Zealand was up 35%, while revenue in China increased by 28%. The group’s business in India was up 21% while in Latin America revenue grew 6%, primarily driven by Brazil and Argentina.

In the global business, total organic revenue growth per working day was up 36% and up 26% compared to Q4 2019. Randstad Sourceright revenue increased by 44% while Monster revenue was up 12%.

Revenue by business line

Total revenue of permanent placements in the revenue categories 'Staffing', 'Inhouse', and 'Professionals', amounted to €155 million in Q4 2021 (Q4 2020: €89 million). Revenue of recruitment process outsourcing within Global businesses amounted to €91 million in Q4 2021 (Q4 2020: € 35 million).

Randstad also reported revenue for the full year ended 31 December 2021 of €24.63 billion, up 20% on an organic basis and 19% on a reported basis when compared to the previous year.

“We can look back on 2021 and be proud of what we have accomplished. Our positive momentum continued, allowing us to finish the year with record revenue, up 20% YoY and 5% ahead of 2019,” said van den Broek. “As a result of our continued organic investments through #newways, we saw growth outperformance at unprecedented levels and generated a strong return on invested capital of 16.8% for the year.”

During the Q4 period Randstad Group Belgium acquired Hudson Benelux in December 2021. The acquisition of Hudson will be a strong extension of Randstad's current portfolio as well as offering access to new opportunities with services in which Hudson excels, the group stated.Looking ahead, Randstad stated that January organic revenue growth year-on-year was broadly in line with Q4 2021 and indicates continued positive momentum, while exercising caution as visibility remains limited due to pandemic-related effects and macro economic uncertainties.

Q1 2022 gross margin is expected to be modestly lower sequentially due to seasonality. Q1 2022 operating expenses are expected to be modestly higher sequentially.

“For Q1 2022, we are steering towards an incremental conversion ratio of around 30%,” Randstad noted..

In Randstad’s Q3 results, Jacques van den Broek announced that he will step down as CEO and Chair of the Executive Board and Accenture executive, Sander van 't Noordende will be his successor.

“As was announced a few months ago, I will be leaving the company after 34 years,” van den Broek said in the company’s annual report. “I am pleased to leave it in such an excellent state, not only in terms of business performance, but also with a very high employee satisfaction. Clearly, the values of the company are more alive than ever. I am also confident that the executive team and my successor Sander van ’t Noordende will take the legacy forward. With his extensive experience at a global technology-based solutions provider, Sander certainly brings the right background to continue our company’s outperformance and take it to the next level.”

Given the strength of the results, Randstad proposed a total cash dividend of €5 per share for 2021, consisting of a regular dividend of €2.19 and a special cash dividend of €2.81.

Shares in Randstad traded at €65.78, up 4.55% on the day and 1.62% below its 52-week high of €66.86, set on 26 July 2021. The company has a market cap of €11.57 billion.