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Randstad North American revenue growth slows

February 14 2013

Fourth-quarter revenue growth slowed in North America at Randstad Holding NV, the world’s second-largest staffing firm. Meanwhile, global revenue fell 4 percent on an organic basis to €4.23 billion (US$5.60 billion) with declines in Europe, and the company reported its fourth-quarter net loss increased to €97.4 million (US$128.7 million) from €16.5 million.

“A challenging year has ended with a solid final quarter,” CEO Ben Noteboom said in a statement. “We maintained good growth in Latin America and Asia, the rate of decline in Europe stabilized. Japan did particularly well. The demand for recruitment process outsourcing and managed services in the U.S. has been increasing, and the U.K. professional segment improved, boosted by the education sector.”

Randstad reported North American fourth-quarter revenue rose 1 percent on an organic basis to €992.2 million (US$1.31 billion) compared to the fourth quarter of last year. Looking back, revenue had risen 10 percent on a year-over-year, organic basis in the fourth quarter of 2011.

Organic growth excludes the impact of currencies, acquisitions and disposals. However, it does not exclude the impact of the SFN Group, the large U.S. firm Randstad acquired in September 2011.

Randstad said it terminated some staffing contracts in North America because of a stronger focus on profitability. In North American professional staffing, Randstad reported growth in pharma and engineering. However, revenue in IT and finance was around the same level as last year mainly due to lower demand in the banking and finance segment, according to the company. Double-digit growth was reported in managed services and recruitment process outsourcing.

North America gross profit expanded by 4 percent, according to the company.

Randstad also announced it bought back a number of franchises in the U.S., including some of the former SFN franchise businesses.

Globally, Randstad reported revenue fell 4 percent on an organic basis to €4.23 billion. Revenue per working day was down 5.3 percent on a year-over-year basis in the fourth quarter. That compares to growth of 4 percent per working day in the fourth quarter of 2011.

Fourth-quarter revenue in France fell 13 percent on a year-over-year, organic basis to €728.1 million (US$962.2 million). The company said a slowdown was visible across all segments in France. Revenue also fell by 3 percent on an organic basis in the Netherlands, the company’s third-largest market. The decline was in-line with the market, according to the company.

A bright spot was the “rest of the world” segment were revenue rose 7 percent on an organic basis to €404.4 million (US$962.2 million). The company reported Japanese revenue rose by 6 percent and that its Brazilian business grew rapidly.

Fourth-quarter gross margin was 18.2 percent after adjustment for integration costs and one-offs, down from 18.3 percent in the fourth quarter of 2011, the company reported.

Randstad posted a fourth-quarter net loss of €97.4 million (US$128.7 million) compared to a net loss of €16.5 million in the fourth quarter of 2011. The fourth quarter included a noncash, goodwill impairment charge of €139.8 million (US$184.7 million) related to the company’s U.K. and Iberia businesses.

Randstad Holding NV
 For the fourth quarter ended Dec. 31, 2012, compared with the same period in the previous year. (Not adjusted for organic growth, integration costs or one-offs.)
 Revenue: €4.23 billion (US$5.60 billion), -4 percent
 Net loss: €97.4 million (US$128.7 million), vs. net loss of €16.5 million

For the full year ended Dec. 31, 2012, compared with the previous year. (Not adjusted for organic growth, integration costs or one-offs.)
 Revenue: €17.09 billion (US$22.58 billion), +5 percent
 Net income: €36.7 million (US$48.5 million) -80 percent

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