Gradual economic recovery boosts Randstad
30 April 2014
International staffing giant Randstad increased its earnings by 34% in the first quarter as its revenue grew by 4% to €3.97bn (£3.26bn) on the back of a continuing gradual recovery in its markets.
Wed, 30 Apr 2014
International staffing giant Randstad increased its earnings by 34% in the first quarter as its revenue grew by 4% to €3.97bn (£3.26bn) on the back of a continuing gradual recovery in its markets.
Randstad’s US business returned to growth as it benefitted from the improving US economy.
Perm fees, which grew by 9%, continued to pick up from their 6% growth in Q4 of 2013.
The company’s higher profitability was reflected its EBITA (earnings before interest tax and amortisation) margin, which rose from 2.4% to 3.1%, with underlying EBITA rising 34% to €123m.
In the UK revenue was 9% higher, reflecting the impact of changes in currency values. Growth was led by managed services and recruitment process outsourcing, construction/engineering, in-house and education, predominantly through temporary staffing.
In Q1 2014, Randstad Professionals grew by 6%, education grew by 4%, while Randstad Care contracted by 5%. Construction/engineering grew by over 20%. Randstad says its finance business “had a relatively slow start to the year”.
Kevin Lapwood, a partner at market advisory firm Hub Capital Partners, says Randstad’s performance reflects a general pick-up in European markets.
“It’s the sort of slow sustained recovery that we would expect at this stage of the economic cycle,” says Lapwood. He says he expects Randstad’s results to continue to improve.
Lapwood further notes that Randstad’s performance has picked up even in countries with high levels of unemployment such as Spain, where the jobless rate is 25%.
“Recruitment is about confidence, it’s about people being prepared to leave a job and move to another. It’s not so much about the level of unemployment,” he says.
He adds that Randstad has benefitted from a recovery in the professional jobs market in which it focuses.
Jacques van den Broek, chief executive officer of Randstad, says: “The gradual recovery set in motion in 2013 has continued into Q1, with North America returning to growth at the end of the quarter and a continuing, albeit slow, growth trend across most of our European markets.
“We are confident that this gradual recovery will continue. Due to market circumstances in the past few years, the focus of our people has been on strong cost control, and they have done a great job.
“It is now time to turn our attention to generating profitable organic growth through activity-based field steering. Diligent execution in Spain, US staffing and Japan, and the first signs of improvement in many other countries, illustrate this is the way to go.”
Randstad’s US business returned to growth as it benefitted from the improving US economy.
Perm fees, which grew by 9%, continued to pick up from their 6% growth in Q4 of 2013.
The company’s higher profitability was reflected its EBITA (earnings before interest tax and amortisation) margin, which rose from 2.4% to 3.1%, with underlying EBITA rising 34% to €123m.
In the UK revenue was 9% higher, reflecting the impact of changes in currency values. Growth was led by managed services and recruitment process outsourcing, construction/engineering, in-house and education, predominantly through temporary staffing.
In Q1 2014, Randstad Professionals grew by 6%, education grew by 4%, while Randstad Care contracted by 5%. Construction/engineering grew by over 20%. Randstad says its finance business “had a relatively slow start to the year”.
Kevin Lapwood, a partner at market advisory firm Hub Capital Partners, says Randstad’s performance reflects a general pick-up in European markets.
“It’s the sort of slow sustained recovery that we would expect at this stage of the economic cycle,” says Lapwood. He says he expects Randstad’s results to continue to improve.
Lapwood further notes that Randstad’s performance has picked up even in countries with high levels of unemployment such as Spain, where the jobless rate is 25%.
“Recruitment is about confidence, it’s about people being prepared to leave a job and move to another. It’s not so much about the level of unemployment,” he says.
He adds that Randstad has benefitted from a recovery in the professional jobs market in which it focuses.
Jacques van den Broek, chief executive officer of Randstad, says: “The gradual recovery set in motion in 2013 has continued into Q1, with North America returning to growth at the end of the quarter and a continuing, albeit slow, growth trend across most of our European markets.
“It is now time to turn our attention to generating profitable organic growth through activity-based field steering. Diligent execution in Spain, US staffing and Japan, and the first signs of improvement in many other countries, illustrate this is the way to go.”
