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Randstad gross profit up 6.9% in Q4 2015

Randstad has released its fourth quarter 2015 results, revealing its gross profit rose by 6.9% and total EBITDA of €245m, up +18% organically.


The company reported revenue of €4,995m. Its organic growth was recorded at 6.6% and gross profit climbed 6.9%.


Topline growth accelerated in France and remained stable in North America. Gross margin was up 20 bp to 18.9%; perm fees rose 13% and now makes up 9.7% of gross profit (vs. 9.2% last year).


Adjusted net income is up 55% to €193m; ROIC at 18.8% (vs. 15.8% last year). DSO improved to 50.7 (from 51.7 in Q4 2014) and the company had a leverage ratio of 0.2 (vs. 0.5 last year)


"The dedication and commitment of our people resulted in a solid fourth quarter, in which we are pleased to see our top line accelerating in Europe." says Randstad CEO Jacques van den Broek "I am proud that, given the ongoing uncertain macro environment, we have achieved a 4.5% EBITA margin in 2015, in line with our guidance. Furthermore, we welcome all employees of the Proffice Group to Randstad and look forward to creating a leading player in the Nordics. Lastly, we have strengthened the continuity agreement with our founder Frits Goldschmeding, safeguarding the heritage and the values bestowed on us, now and in the future."


Results by country


North America

In North America, revenue growth was 4% year-on-year (Q3 2015: up 4%), against a 1% tougher comparison base. Reported revenue was 18% above Q4 2014. Gross profit growth was 9% (Q3 2015: up 9%), with 10% growth in perm fees (Q3 2015: up 9%).


In Q4 2015, combined US businesses grew 5% (Q3 2015: up 5%), with US Staffing/Inhouse growing by 7% (Q3 2015: up 6%). US Professionals revenue was flat year-on-year (Q3 2015: up 2%). Randstad Sourceright North America reported 16% net fee growth (Q3 2015: up 17%). In Canada, revenue declined by 2% (Q3 2015: down 4%), remaining ahead of a challenging market. Underlying EBITA margin for the region increased from 5.3% last year to 5.6% in Q4 2015.



In the Netherlands, revenue was up 9% year-on-year (Q3 2015: up 10%), on a 1% tougher comparison base. Overall perm fee growth was 3% (Q3 2015: up 28%). Staffing and Inhouse businesses grew 7% (Q3 2015: up 9%), with growth impacted by price pressure. The Professionals business continued its strong growth, and was up 21% (Q3 2015: up 20%). EBITA margin in the Netherlands was 6.7%, compared to 6.9% last year.



In France, revenue accelerated, with growth of 10% (Q3 2015: 3%), ahead of the market. Staffing and Inhouse revenue increased 10% (Q3 2015: up 3%), with automotive and construction improving. The Professionals business was up 10%, driven by healthcare. Perm fees were up 29% compared to last year (Q3 2015: up 23%). Our EBITA margin was 5.2%, compared to 5.7% last year.



In Germany, revenue per working day was up 1% year-on-year (Q3 2015: +2%). The combined Staffing and Inhouse business was up 2% (Q2 2015: up 2%), while Professionals was down 1% (Q3 2015: up 1%). Gross profit growth accelerated to 13% in the quarter (Q3 2015: up 2%). Q4 2014 was impacted by the 13 week ruling on holiday and sick pay. Underlying EBITA margin in Germany improved to 5.6%, compared to 3.3% last year.


Belgium & Luxembourg

In Belgium & Luxembourg, revenue per working day grew significantly by 6% (Q3 2015: up 1%). The Staffing/Inhouse business grew 8% (Q3 2015: up 1%), while the Professionals business was down 5% (Q3 2015: down 7%). Overall, our focus on client profitability, combined with strong cost control, is paying off. Gross profit increased by 8% (Q3 2015: up 6%), while EBITA margin moved up to 6.5%, from 5.7% last year.



In Iberia, revenue growth improved further, and was up 11% (Q3 2015: up 8%), with gross profit growth of 13% (Q3 2015: up 10%). Spain was up 16% (Q3 2015: up 12%), with Staffing/Inhouse combined growing 15% (Q3 2015: up 12%). Our focus on permanent placements (up 39%) and Professionals (up 61%) continued to pay off. In Portugal, revenue improved by 1% (Q3 2015: down 2%). However, as a result of the company's focus on client profitability, gross profit growth accelerated to 18%. Overall underlying EBITA margin was 5.2% in Q4 2015, compared to 4.6% in the same period last year.


United Kingdom

Revenue per working day in the UK was down 4% compared to the prior year (Q3 2015: up 1%). Gross profit growth was flat year-on-year (Q3 2015: up 2%). Overall perm fee growth was up 11% year-on-year (Q3 2015: up 4%). The specialties businesses performed well in an increasingly challenging market environment. EBITA margin continued to improve, now at 3.6% from 1.8% last year.


Other European countries

Across 'Other European countries', revenue per working day grew by 13% (Q3 2015: up 11%). This was supported by solid growth continuing in Italy, which was up 19% (Q3 2015: up 20%). In Poland, revenue growth continued to +10% (Q3 2015: up 7%). Revenue in the Swiss business was up 3% year-on-year, still ahead of a difficult market (Q3 2015: 0%). In the Nordics, revenue growth was 7% (Q3 2015: up 11%). Overall EBITA margin was 4.4% (Q4 2014: 4.9%).


Rest of the world

Overall revenue in the 'Rest of the world' region grew 7% organically, on a 3% tougher comparison base (Q3 2015: up 11%). In Japan, revenue grew by 1% (Q3 2015: up 6%). Revenue in Australia/New Zealand grew by 5% (Q3 2015: up 11%), and China improved to 7% growth year-on-year, against an 8% tougher comparison base (Q3 2015: up 27%). Our business in India continued to show good growth at 11% (Q3 2015: up 16%), while Latin America was stable with growth of 15% (Q3 2015: up 15%), driven by Argentina and Chile. Overall, EBITA margin in this region improved to 1.5%, from 0.5% last year.


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