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World – Robert Half bullish on Germany

25 July 2012

California-based recruitment firm Robert Half International Inc (RHI:NYQ) increased second-quarter revenue by +10% to US$1.03 billion year-over-year although growth rates outside the US were not as strong due to the European debt crisis, the firm said on Tuesday.

The company, which places finance and accountancy staff and is the ninth largest staffing firm in the world based on revenue, showed a strong balance sheet with gross profit rising +12% to US$415.3 million. Net income in the quarter was up +25% from US$36.4 million last year to US$45.3 million.   

“Demand for our specialized staffing and consulting services remained strong during the quarter, particularly in our U.S. staffing operations, which grew 17% versus the prior year,” said Harold M. Messmer Jr., chairman and CEO of Robert Half International. “Gross margins continued to expand with an increasing mix of permanent placement and temp-to-hire conversion revenues.”

In a conference call to analysts Mr Messmer said the company had limited exposure to the hardest-hit countries in Europe, “but we did feel some of the effects of a more cautious business environment and lower currency exchange rates in Europe and other parts of the world.”

However, Germany performed strongly in the quarter. “We're doing extremely well in Germany, not only in accounting finance, but in technology as well,” said Vice Chairman, Keith Waddell, in the conference call yesterday. “We're very bullish on Germany. We continue to invest in headcount in Germany. Germany is very profitable. The margins in Germany approach the margins in the United States, which we're very pleased with.”

He added that internationally the company also showed growth in Australia and Canada although Belgium, France and the UK saw declines in the quarter. For the third quarter, the firm is expecting yearly growth rates in the international region to go negative.

All divisions showed an increase in revenue with Accountemps, the firm’s largest staffing division for temporary professionals, performing particularly well. This division accounted for 37% of company revenues, contributing US$381.0 million, up from US$345.3 million a year ago.

OfficeTeam, an administrative staffing division which represents almost 20% of company-wide revenues, increased turnover to US$202.8 million in the quarter from US$188.7 million at the same time last year.

Second-quarter revenues for Robert Half Management Resources, a specialist division for senior-level accounting finance professionals, were US$125.7 million compared to US$113.3 million a year ago.

Robert Half Technology reported revenues of US$119.6 million, up from US$105.1 million a year ago. This division targets information technology professionals and accounted for over nearly 12% of company-wide revenues.

In the quarter, Robert Half Finance & Accounting revenues also rose to US$89.1 million from US$80.7 million in Q2 2011, contributing around 9% of total Group revenues.

Protiviti, the global business consulting and internal audit firm, reported revenue of US$110.2 million in the second quarter, up +5% from last year.

Yesterday the company’s share price was down -2% closing at US$27.32, also down -6.05% from a year ago and -15.5% below its 52-week high of US$32.32 set in April 2012. The firm has a market value of US$3.98 billion. 


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