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World – Kelly Services: Europe and Asia grow while Americas decline

07 November 2013

Global staffing firm Kelly Services (KELYA: NSDQ) reported revenue for the third quarter to the end of September 2013 of USD 1.345 billion, a fall of -0.6% compared with USD 1.354 billion for the same period last year.

Gross profit for the period fell, year-on-year, by -3.1% to USD 220.4 million from USD 227.5 million. Net income, however, rose by +13.5% to USD 18.8 million, compared with USD 16.6 million a year ago.

Carl T. Camden, President and Chief Executive Officer of Kelly Services, commented: “We’re pleased that our third quarter performance surpassed our expectations despite an erratic and lacklustre economy. The Americas delivered a nice turnaround in fee performance and KellyOCG brought in strong revenue growth and outsized operating profits.”

“Overall, our results continue to demonstrate that Kelly’s strategy is responding to market demands for more holistic workforce solutions, access to skilled talent, and workforce models that help companies achieve their short- and long-term business goals.”   

Revenue from services across the Americas fell by -1.5% in constant currency to USD 967 million from USD 985.2 million, year-on-year. The United States, Kelly Services’ home market and largest region in terms of revenue, reported a -1.2% drop in organic revenue from USD 853.4 million to USD 843.5 million. The biggest year-on-year fall in organic revenue was in Canada with -10.8%; down to USD 52.9 million from USD 61.9 million last year. Puerto Rico also reported fallen revenue, down to USD 24.4 million from USD 24.5 million, an organic drop of -0.3%.

Mexico and Brazil were the only countries across the Americas to report organic revenue growth during the third quarter. Brazilian revenue rose by +1.8% to USD 13.1 million while Mexican revenue increased by +4.5% to USD 33.1 million. 

Across Europe, the Middle East, and Africa (MENA) revenue from services rose by +2.6% in constant currency to USD 277.8 million from USD 263.1 million last year. The biggest year-on-year growth in organic revenue was reported by Portugal, rising from USD 18.8 million in Q3 212 to USD 24.1 million this year. Switzerland performed well during the quarter, reporting revenue of USD 68.6 million, up by +8.8% from USD 61 million last year. Russia and the United Kingdom also reported organic revenue growth, Russia rose by +6.6% from USD 31.7 million to USD 32.9 million, and the UK rose by +5.6% from USD 25.6 million to USD 26.5 million. 

The sharpest drop in terms of constant currency was in Germany, falling from USD 17.8 million to USD 17.4 million, down by -7.4%. Norway reported a fall of -7.2% in constant currency from USD 17.6 million in 2012 to USD 16.1 million in 2013. France and Italy also reported lower organic revenue; France fell by -2.2% to USD 62.4 million while Italy reported a -0.8% drop to USD 13.8 million. Collectively, the other countries throughout the EMEA region reported a -11.6% fall in organic revenue to USD 16 million from USD 17.2 million last year.  

Asian-Pacific revenue from services rose by +1.5% in constant currency, despite reporting a lower figure of USD 100.8 million in 2013 compared with USD 105.9 million last year. Organic growth was reported in two countries; Australia, which increased by +3.8% to USD 32.4 million, and Singapore, which rose by +14.8% to 29.4 million.

Revenue in Malaysia fell by -6.2% in constant currency to USD 17.2 million from USD 19.1 million last year. In New Zealand revenue for Q3 2013 was USD 12.6 million, equating to a -1.3% drop in constant currency from USD 13 million last year. Collectively the other countries throughout Asia-Pacific reported a -18.1% drop in revenue on an organic basis, to USD 9.2 million from USD 12.4 million. 

Revenue from KellyOCG, the company’s outsourcing and consulting group, reported organic growth of +19%, rising from USD 282.8 million in Q3 2012 to USD 335.8 million in Q3 2013. Gross profit for the business increased by +14%, in constant currency, to USD 85.4 million, up from USD 75 million a year ago.    

Following the release of the results yesterday, the company’s share price closed up +2.06% at USD 21.33, an increase of +56.5% compared with a year ago. Based on its share price, the company has a current market value of USD 858 million.  

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