Adjusted net income up 6% in Q1 2018 for Randstad
Randstad has released its financial results for the first quarter of 2018.
Organic revenue per working day grew by 7.4% in Q1 resulting in revenue of € 5,683m (Q4 2017: up 8.7%). Reported revenue was 2.3% above Q1 2017, of which M&A contributed 0.1%. FX and working days had a negative effect of 4.5% and 0.8% respectively.
In North America, revenue per working day increased 1% (Q4 2017: up 1%). Growth in the US was flat (Q4 2017: flat), while Canada grew by 7% (Q4 2017: up 10%). In Europe, revenue per working day grew by 9% (Q4 2017: up 11%). Topline growth in France amounted to 10% (Q4 2017: up 12%), while the Netherlands grew by 5% (Q4 2017: up 3%). Germany was up 7% (Q4 2017: up 10%), while sales growth in Belgium was 9% (Q4 2017: up 10%), despite 5% tougher comparables. Italy grew by 19% (Q4 2017: up 26%), while revenues in Iberia were up by 11% (Q4 2017: up 15%). In the 'Rest of the world' region, revenue increased 11% (Q4 2017: up 10%); Japan increased by 11% (Q4 2017: up 9%), while Australia & New Zealand rose by 6% (Q4 2017: up 8%).
Perm fees grew by 13% (Q4 2017: up 13%), with Europe up 15% (Q4 2017: up 18%) and North America accelerating to 8% (Q4 2017: up 5%). In the 'Rest of the world' region, perm fee growth was 12% (Q4 2017: up 14%). Perm fees made up 10.9% of gross profit.
In Q1 2018, gross profit amounted to € 1,114m. Organic growth was 4.5% (Q4 2017: up 7.9%), impacted by adverse mix effects related to Monster. Currency effects had a negative impact on gross profit of € 60 million compared to Q1 2017.
Gross margin was 19.6%, 80bp below Q1 2017. Temporary staffing had a 30bp negative effect on gross margin (Q4 2017: flat), given the adverse impact of working days, a higher sickness rate, mix effects and changes in CICE in France. Permanent placements had 10bp positive effect on gross margin, while HRS/others had a negative impact of 60bp, mostly related to Monster and FX.
On an organic basis, operating expenses increased by € 15m sequentially to € 897m. This is primarily related to investments in our organic sales growth (including digital), partially offset by the cost optimisation program within Monster. Compared to last year, operating expenses were up 2% (Q4 2017: up 5%) organically, while there was a € 53m positive FX impact.
Underlying EBITA increased organically by 7% to € 217m. Currency effects had a € 8 million adverse impact YoY. EBITA margin reached 3.8%, flat compared to Q1 2017. This included an adverse working day effect and the extraordinary high sickness rate in several countries.
In Q1 2018, adjusted net income rose by 6% YoY to € 157m. Diluted underlying EPS amounted to € 0.85 (Q1 2017: € 0.81). The average number of diluted ordinary shares outstanding remained almost stable compared to Q1 2017 (183.5m versus 183.4m).
"We started 2018 well, achieving sound organic revenue and even double-digit perm growth," said CEO, Jacques van den Broek (pictured). "Overall market circumstances remained positive. We continue to outperform in most relevant markets, driven by our Tech & Touch strategy and strong operational execution. Nevertheless, we remain focused on the balance between growth and profitability. We support our consultants, clients and candidates in adopting and embracing digital where this works best, and so optimizing human interaction. Our global roll-out of digital initiatives such as workforce scheduling, data-driven sales and talent engagement is in full swing."