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Netherlands – USG People optimistic despite losses

28 February 2014

Dutch staffing firm USG People (USG: NL) reported revenue of €580.4 million for the fourth quarter ending 31 December 2013, a fall of -2.4% from €594.7 million a year ago. The company reported a gross profit of €128.7 million during the quarter, a year-on-year increase of +3.4% from €124.5 million last year.

Despite reporting a net loss of €12.3 million for the period, this marks a significant improvement compared with the company’s net loss of €211.1 million last year.

Rob Zandbergen, CEO of USG People, commented: In the fourth quarter our revenue started growing again and our underlying profitability showed a strong improvement. In the Netherlands our growth was in line with the market. In France we comfortably outperformed the market and revenue also improved in Belgium and Germany.”

“Now that the recovery in our markets appears to be persisting USG People, with its clear positioning of each brand and improved cost structure, is well placed to take good advantage of this. We are present in fundamentally sound markets and our staff are exceptionally motivated to create up-to-the-minute solutions for our clients and candidates. I offer warm thanks to our colleagues for their tireless efforts and their contribution to the results we achieved in the past year," he added.

On an annual basis, USG People reported revenue of €2.3 billion, a fall of -4.2% from €2.4 billion in 2012. The company achieved a gross profit of €486.9 million for the year, equating to a drop of -9.1% from €535.3 million a year ago.

During 2013, USG People reported a net loss of €26.1 million, compared with a net loss of €191.1 million in 2012.

2013 was a period of significant change for USG People; with the reduction of their board members from four to two and the sale of its General Staffing businesses in Spain, Italy, Austria, Switzerland, Poland, and Luxembourg to Randstad. 

The company’s largest business segment, General Staffing, reported revenue during Q4 2013 of €346.6 million, a marginal increase from €345.1 million a year ago. In its home market of the Netherlands, USG People reported revenue down -1% on an organic basis to €138.2 million. Revenue from Belgium fell by -2% on an organic basis from €94.4 million in Q4 2012 to €92.5 million this year. Revenue derived from France increased by +5% in constant currency to €115.9 million from €110.7 million last year.

On an annual basis, General Staffing revenue fell by -5% in constant currency to €1.35 billion, down from €1.42 billion in 2012. In the Netherlands revenue fell by -6% in constant currency to €541.8 million from €574.2 million last year. Revenue from Belgium fell by -5%, on an organic basis, to €352.5 million from €372.6 million in 2012. Revenue from France fell by -3% in constant currency to €459.7 million in 2013 from €473.5 million in 2012.

USG People’s Specialist Staffing business reported revenue growth of +2%, in constant currency, rising to €195.9 million from €191.7 million in Q4 2012. The Netherlands remains the company’s largest Specialist Staffing market with revenue of €92.7 million, equating to year-on-year organic growth of +10%. Belgium proved a more difficult market, reporting an organic drop of -9% in revenue to €45 million from €49.6 million last year. Revenue from Germany increased, year-on-year, by +1% in constant currency to €56 million from €55.7 million a year ago.

On an annual basis, revenue from Specialist Staffing fell by -6% on an organic basis to €749.1 million down from €793 million in 2012. The best performance for the business segment was in the Netherlands, which reported revenue of €336.6 million, unchanged in terms of constant currency from a year ago. The worst performance was reported in Belgium where revenue fell -13% on an organic basis from €208.1 million in 2012 to €182.3 million this year. Revenue from Germany fell by -7% on an organic basis to €221.6 million in 2013 from €238.5 million last year.  

The company’s Professionals business reported revenue of €37.9 million in Q4 2013, a drop of -9% in constant currency from €41.7 million last year. Revenue fell in the Netherlands to €25.1 million and in Belgium to € 12.1 million, by -5% and -14% on an organic basis, respectively. 

On an annual basis, revenue derived from the Professionals business fell by -10% on an organic basis to €151.2 million from €167.5 million a year ago. Revenue from the Netherlands dropped organically by -4% to €97.9 million, down from €102 million last year. Belgian revenue fell by -16% in constant currency to €50 million from €59.6 million in 2012.

Regionally, revenue from the Netherlands increased, year-on-year, across all business segments during the fourth quarter by +2% on an organic basis to €256 million from €250.8 million last year. On an annual basis, revenue from the Netherlands fell by -4% to €976.2 million from €1 billion a year ago.

The Belgian market remained challenging in 2013, reporting a fall in revenue of -5% to €149.6 million during the fourth quarter 2013 from €158 million in Q4 2012, and a fall of -9% to €584.9 million during the whole year from €640.3 million last year, on an organic basis.

Revenue derived from France during the fourth quarter increased by +4% in constant currency to €116.8 million from €112.4 million last year but dropped by -4% to €464.3 million for 2013 on an annual basis from €481.8 million in 2012.

In USG People’s smallest region, Germany, revenue during Q4 2013 increased by +1% in constant currency to €56.1 million from €55.7 million in Q4 2012, but fell by -7% to €221.6 million during the course of 2013 from €238.5 million in 2012.

Rob Zanderbergen concluded: “The positive trend persisted in the fourth quarter, enabling the turning point to growth to be passed. This positive trend also continued in the early weeks of 2014. In 2013 we made some changes to our organisation to achieve a more focused positioning and a major reduction in the cost base. The combining of our brands will be given further shape in 2014, allowing us to reinforce our competitive strength. Our revamped organisation will enable us to focus our attention and resources on markets where we have a strong position. In these markets we will continue to invest in our infrastructure and in the development of the services we provide to our clients and candidates.” 

“USG People is well placed for growth and to take advantage of the attractive growth and earnings potential that the markets have to offer should the recovery continue,” he added.

In trading today, the company’s share price rose by +6.5% to €13.54, an increase of +125.6% compared with a year ago. Based on its current share price, the company has a market value of €1.02 billion.   

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