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Randstad announces 3.3.% increase in GP in Q3 2016

Randstad has released its third quarter results for 2016, confirming revenue of €5,349m, organic growth of 4.2% and 3.3% growth in gross profit.


Organic revenue per working day grew by 4.2% in Q3 to €5,349M (Q2 2016: up 3.1%). Reported revenue was 7.5% above Q3 2015, of which FX made up -0.7%. The M&A impact was +4.5%.


In North America, revenue per working day was up 1% (Q2 2016: flat). Growth in the US remained broadly stable, with Canada growing amidst a challenging market (up 5%). In Europe, revenue per working day grew by 5% (Q2 2016: up 4%).


The Netherlands was up 2%, France increased 5%, and Germany improved by 5%. In the 'Rest of the world' region, revenue per working day was up 8% (Q2 2016: up 4%), with Australia/New Zealand up 8%, and Japan up 5%.


Perm fees grew 7% (Q2 2016: up 11%), with North America flat and Europe up 14% respectively. In Asia, fee growth was 5%, led by Japan (up 44%). Perm fees made up 2.0% of revenue and 10.5% of gross profit (Q3 2015: 10.5%).


In Q3 2016, gross profit amounted to €1 billion. Organic growth was 3.3% (Q2 2016: 2.4%). Currency effects had a negative impact on gross profit of €6m compared to Q3 2015.


Gross margin was 18.7%, 10bp below Q3 2015 (as shown in the graph above). Temporary staffing had a -/-10bp impact on the Group, which is the result of mix and price. Permanent placements and HRS/others had a negligible impact on the gross margin


Underlying EBITA increased organically by 5.1% to € 271m. Currency effects had a negative impact of €1m YoY. The EBITA margin reached 5.1%, up from 5.0% in Q3 2015. On an annualized basis (L4Qs), the underlying EBITA margin improved from 4.4% to 4.6%. Randstad saw an organic incremental conversion ratio (ICR) of 53% over the last four quarters.


"In Q3, growth trends were resilient across all regions, which appears to be continuing into October," said Randstad CEO, Jacques van den Broek (pictured). "I am happy with the solid performance across our countries, while this year we welcomed more than 1,300 new colleagues in Scandinavia, Italy, Japan and Germany. We look forward to harnessing the full potential of our corporate development. I wish my colleagues all the success in this process"


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