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Randstad, the second largest staffing company in the world, reports a decline in revenues of 30% from â‚¬8.66 billion to â‚¬6.04 billion for the first six months of 2009. EBITA was down by 72% from â‚¬414 million to â‚¬116 million. EBITA after integration costs and one-offs were down 82% from â‚¬274.5 million to â‚¬48.6 million.
Cost reductions are not matching the revenue decline but Randstad has managed to integrate the recently acquired Vedior Group one year ahead of schedule. The annualised cost synergies from this approach are â‚¬100 million while tax synergies amount to approximately â‚¬40 million. A surprising number of offices were closed during the second quarter (340); some due to integration but others due to rationalization in markets such as the Netherlands and the UK. Randstad has also exited from six smaller markets (Bulgaria, Croatia, Montenegro, Serbia & Romania, Finland and Thailand) reducing their international network to 46 countries.
"The second quarter has proved stable on average." says Ben Noteboom, CEO Randstad. "The US staffing & in-house businesses as well as our main European markets clearly show some stabilization. At the same time many segments in our professionals portfolio are still shrinking. Our people are showing their true value, evidenced, for example, by gaining a significant number of new contracts. On balance, it is too early to declare a beginning of recovery.â€VbCrLf
Noteboom says further, â€œDevelopments like the new legislation in France to open up the public sector for our services are good news. In the short-term such effects will be small, so we will continue to focus on cost management. We are making good progress on preparing for the future."
Second quarter revenues (measured on a per working day basis) fared differently by geography. Of Randstadâ€™s major European markets, they were down least in the Netherlands declining by 23%, in France the fall was 36%, Germany was down 38%, the UK down 29%, Spanish revenues were down by 34%, and Belgium/Luxembourg down by 28%. Rest of Europe revenues were halved although growth was maintained in Turkey, Hungary and Greece, while Portugal had only a single digit decline. Outside Europe, North American revenues reduced by 33% organically, the same rate of decline as the first quarter of 2009.
Despite the signs of stabilization, Randstad has also seen increased pricing pressure in the second quarter with the underlying temporary margin weaker than the prior quarter. In its outlook, the company remains cautious and thinks that it is too early to conclude the market has bottomed out.
In early trading today Randstadâ€™s shares were up by â‚¬1.65% to â‚¬24.28.