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Randstad first-quarter revenue holds steady; US revenue up 3%, but German revenue falls 10%

April 24, 2019

First-quarter revenue edged up 0.5% on an organic basis at Randstad NV. Revenue rose 3% on an organic basis in the US and was flat in France — two of the company’s largest market in terms of revenue. On the other hand, German revenue fell 10% on an organic basis, but the company said the performance was ahead of market.

(€millions) Q1 2019 Q1 2018 % change % organic change Q1 2019 (US$millions)
Revenue € 5,718 € 5,683 1% 0.5% $6,413
Gross profit  € 1,128 € 1,114 1% 0.6% $1,265
Gross margin 19.7% 19.6%      
Operating profit € 188 € 180 4% - $211
Net income € 133 € 130 2% - $149

Randstad’s measure of organic growth excludes the impact of currencies, disposals and reclassifications. It also adjusts for number of working days.

First-quarter revenue in the company’s US staffing/inhouse business rose by 3% on an organic basis, and professionals revenue was up 2% organically. But Canadian revenue fell 2% on an organic basis.

Revenue in the company’s “rest of the world” segment rose 10% on an organic basis in the fourth quarter. The segment includes Australia, New Zealand, Japan, China and Latin America.

At RPO and MSP division Randstad Sourceright, included in the company’s “global business” segment, revenue rose 13% an organic basis in the first quarter. However, Monster revenue, also in the global business segment, fell 17% organically in the first quarter. 

Revenue by geography

(€millions) Q1 2019 Q1 2018 % change % organic change Q1 2019 (US$millions)
North America € 1,042 € 961 8% 2% $1,169
France € 879 € 897 -2% 0% $986
Netherlands € 830 € 834 0% 1% $931
Germany € 533 € 591 -10% -10% $598
Belgium & Luxembourg € 384 € 388 -1% 1% $431
Italy € 389 € 392 -1% 1% $436
Iberia € 352 € 351 0% 0% $395
Other European countries € 538 € 545 -1% 0% $603
Rest of the world € 488 € 457 7% 10% $547
Global businesses € 283 € 267 6% 4% $317

Revenue by business line

(€millions) Q1 2019 Q1 2018 % change % organic change Q1 2019 (US$millions)
Staffing € 2,897 € 2,977 -3% -2% $3,249
Inhouse Services € 1,288 € 1,258 2% 3% $1,445
Professionals € 1,250 € 1,181 6% 4% $1,402
Global businesses € 283 € 267 6% 4% $317

Quote

“Our organic revenue growth stabilized at a positive level, with market share gains in the Netherlands, Belgium and Germany, while growth in France returned to market level,” CEO Jacques van den Broek said. “Our strong regional diversification continued to pay off, as Japan, Australia, India and the Latin America region delivered significant contributions to our growth and profitability.”

Van den Broek also noted progression in Randstad’s digital strategy, saying its Youplan online platform has now been rolled out in 13 countries.

Guidance

Revenue growth in March increased at a pace similar to the 0.5% organic growth in the first quarter, and development of volumes in early April indicates a continuation of the first-quarter growth trend. However, first-quarter gross margin is expected to be slightly higher sequentially. Randstad expects slightly higher operating expenses sequentially given seasonality.

Share price and market cap

Randstad shares were up 3.92% to €51.42 in Amsterdam at 11:38 p.m. Eastern time today; the company had a market cap of €9.07 billion, according to FT.com.

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