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Randstad reports stable revenue growth

October 30, 2014

Randstad’s third-quarter revenue growth was “stable,” but underlying trends changed, said CEO Jacques van den Broek. Revenue growth accelerated in the US and the Netherlands but decelerated in France and Germany.

Third-quarter revenue at the world’s second-largest staffing firm rose 4 percent year over year — 4 percent on an organic basis — to €4.52 billion (US$5.73 billion). Year-over-year organic growth was 5 percent in the second quarter and up 4 percent in the first quarter.

Quote

“Revenue growth was stable this quarter but the underlying trends were different,” said CEO Jacques van den Broek. “In the US and the Netherlands, markets are growing. Germany and France see growth slowing down. In several markets, our people are now keeping up with the market or beating it. Our growth rate in permanent placements is also quite encouraging. The attention to commercial activities is paying off. I’m inspired also by some great initiatives, such as our drive to find work for thousands of unemployed young people. All this, coupled with our continued focus on efficiency, will allow us to improve our performance further.”

Revenue

  Q3 2014 (€millions) Q3 2013 (€millions) % growth % organic* Q2 2014 (USD$millions)
Revenue € 4,516.3 € 4,362.7 3% 4% $5,729.0
* Organic change is measured excluding the impact of currencies, acquisitions, disposals and reclassifications. For revenue, the organic change has been adjusted for the number of working days. When calculating growth, the USG activites are included on a pro gorma basis and therefore not excluded as acquisition effect.

Revenue by geography

  Q3 2014 (€millions) Q3 2013 (€millions) % growth % organic* Q3 2014 (USD$millions)
North America € 964.8 € 925.4 4% 5% $1,223.9
France € 727.5 € 762.1 -5% -4% $922.8
Netherlands € 721.6 € 696.4 4% 4% $915.4
Germany € 517.9 € 510.0 2% 2% $657.0
Belgium & Luxembourg € 353.8 € 338.3 5% 6% $448.8
United Kingdom € 203.7 € 195.6 4% -3% $258.4
Iberia € 290.8 € 267.0 9% 9% $368.9
Other European countries € 357.9 € 308.7 16% 16% $454.0
Rest of the world € 378.3 € 359.2 5% 11% $479.9
* Organic change is measured excluding the impact of currencies, acquisitions, disposals and reclassifications. For revenue, the organic change has been adjusted for the number of working days. When calculating growth, the USG activites are included on a pro gorma basis and there not excluded as acquisition effect.

Revenue by business line

  Q3 2014 (€millions) Q3 2013 (€millions) % growth % organic* Q3 2014 (USD$millions)
Staffing € 2,680.5 € 2,648.4 1% 2% $3,400.3
Inhouses Services € 958.5 € 876.4 9% 10% $1,215.9
Professionals € 877.3 € 837.9 5% 4% $1,112.9
* Organic change is measured excluding the impact of currencies, acquisitions, disposals and reclassifications. For revenue, the organic change has been adjusted for the number of working days. When calculating growth, the USG activites are included on a pro forma basis and there not excluded as acquisition effect.

Gross margin

  Q3 2014  Q3 2013 
Gross margin 18.5% 18.2%

Operating profit

  Q3 2014 (€millions) Q3 2013 (€millions) % growth Q3 2014 (USD$millions)
Operating profit € 167.9 € 134.2 25% $213.0

Net income

  Q3 2014 (€millions) Q3 2013 (€millions) % growth Q3 2014 (USD$millions)
Net income € 113.3 € 83.8 35% $143.7

Share price and market cap

Shares in Randstad fell 2.76 percent to €41.85. The company has a market cap of €7.53 billion.

North America

  • Combined US staffing and inhouse businesses grew by 10 percent per working day, driven by strong performance in the industrial segment. US Professionals business was stable in the quarter.
  • In Canada, revenue was stable after three quarters of decline. Canadian staffing and inhouse business was down 2 percent, which was offset by growth in professionals, notably perm.

France

  • Combined staffing and inhouse businesses was 5 percent below last year. The decline was driven by a significant deterioration in the construction and aeronautics sectors, partially offset by higher demand in the automotive and industrial sectors.
  • Inhouse services revenue grew by 12 percent, following a number of client wins and continued transfers from staffing.
  • Staffing was 8 percent below last year.

Germany

  • Revenue per working day grew by 2 percent. Gulp and Tempo-Team have benefited most from the additional focus on improving activity levels through Randstad’s activity-based field steering model. Revenue growth in staffing was stable year over year while inhouse grew 4 percent.

Other European countries

  • Across Other European countries, revenue per working day grew by 16 percent, driven by continued double-digit growth across all countries.
  • In Italy, revenue grew by 12 percent. In line with previous quarters, growth was led by the industrial segment. Inhouse business grew by 34 percent, as Randstad transferred business from staffing.

Rest of world

  • Growth held up in Asia and Australia, according to the company.
  • In Latin America, Argentinean business grew by 13 percent where market conditions remain challenging due to inflation.
  • In Japan, revenue grew by 6 percent.
  • China grew by 54 percent based on good performance across the IT and manufacturing segments.