Randstad, the world’s largest talent company and a partner of choice to clients, announced its financial results for the 2nd quarter on 25 July 2023.

Revenue

Organic revenue per working day declined by 5.1% YoY in Q2 2023 resulting in revenue of € 6,465 million (Q1 2023: down 4.2%). Reported revenue was down 6.1% YoY, of which working days had a negative impact of 0.8% while FX had a negative effect of 1.4%. M&A positively contributed 1.2%.

In North America, revenue per working day was down 14% (Q1 2023: down 10%). Revenue in the US was down 13% (Q1 2023: down 11%), while Canada was down 15% YoY (Q1 2023: down 7%). In Northern Europe, revenue per working day was down by 6% (Q1 2023: down 6%). Revenue in the Netherlands was down 9% (Q1 2023: down 11%), while Germany was down 4% (Q1 2023: up 1%). Revenue in Belgium was down 8% (Q1 2023: down 8%). In Southern Europe, UK and Latin America, revenue was down 1% (Q1 2023: down 2%). Revenue in France was up 2% (Q1 2023: down 1%) and in Italy revenue was down 5% (Q1 2023: down 3%). Revenue in Iberia was down 3% (Q1 2023: down 6%). In the Asia Pacific region, revenue was up by 5% (Q1 2023: up 4%); Japan increased by 7% (Q1 2023: up 3%), while Australia & New Zealand rose by 3% (Q1 2023: up 5%). Global Businesses revenue was down 6% YoY organically (Q1 2023: up 2%). Enterprise solutions revenue decreased by 5% YoY (Q1 2023: up 5%), as the decline in RPO was partially offset by growth from outplacement and career mobility services. Monster revenue was down 14% YoY (Q1 2023: down 14%).

Perm fees decreased by 16% YoY (Q1 2023: down 8%). Perm fees in Northern Europe was up 1% YoY (Q1 2023: up 17%) and Southern Europe, UK and Latin America was down 7% (Q1 2023 up 2%). North American perm fees was down 36% YoY (Q1 2023: down 22%). In the Asia Pacific region, perm fees decreased by 5% (Q1 2023: down 18%). Perm fees made up 11.7% of gross profit.

Gross profit

In Q2 2023, gross profit amounted to € 1,341 million, down 6.6% YoY organically (Q1 2023: down 2.1%). Currency effects had a negative € 26 million impact on gross profit compared to Q2 2022.

Gross margin was 20.7% in the quarter, 50bp below Q2 2022 (as shown in the graph above). Temporary placements had a 10bp positive impact on gross margin (Q1 2022: 40bp positive impact). Permanent placements had a 25bp negative impact, while HRS/other had a 35bp negative impact.

Operating expenses

On an organic basis, operating expenses decreased by € 25 million sequentially to € 1,070 million. Compared to last year, operating expenses were down 6% organically (Q1 2023: up 1%), while currency effects had a € 20 million positive impact.

Personnel expenses were down 4% sequentially. Average headcount (in FTE) amounted to 43,530 for the quarter, organically down 6% YoY and down 3% sequentially (net reduction of 1,390 FTE). Productivity (measured as gross profit per FTE) was down 1% YoY (Q1 2023: down 3%). We operated a network of 4,820 outlets end of period (Q1 2023: 4,832). Operating expenses in Q2 2023 were adjusted for a total of € 54 million of integration costs and one-offs (Q2 2022: € 43 million). This mainly reflects integration costs for our recent acquisitions and restructurings in a few countries.

Sander van ‘t Noordende, CEO of Randstad, commented: "We delivered a solid set of results in the second quarter amid challenging conditions across our markets. We have seen performance levels below the record results achieved in the same period last year. I am pleased with how our teams have responded to the current operating environment.

We continue to benefit from our strong market position, our deep customer relationships and our commitment to our talent. These factors, along with our disciplined management, have contributed to an underlying EBITA of € 271m, resilient EBITA margin performance of 4.2% and strong free cash flow. Our robust balance sheet enables us to continue our strategy of disciplined investments to strengthen our offer and we were delighted to announce the acquisition of Grupo CTC earlier this month. We are excited by the opportunities in Spain and Portugal and I would like to take this opportunity to welcome our new colleagues to Randstad.

The market trends we experienced in the second quarter have continued in early July, with talent scarcity and wage inflation persisting. We remain confident in our ability to adapt our operations based on our field steering model, to provide the best possible service to our customers and talent, and to capture the growth opportunities available to us.

Finally, we are looking forward to welcoming Dimitra Manis to our Supervisory Board, pending shareholder approval."

SOURCE Randstad