Randstad, the world’s largest talent company and a partner of choice to clients, today announced its financial results for the first quarter on May 3, 2023.

Financial performance

Revenue
Organic revenue per working day declined by 4.2% YoY in Q1 2023 resulting in revenue of € 6,518 million (Q4 2022: up2.4%). Reported revenue was down 1.6% YoY, of which working days had a positive impact of 1.1% while FX had a positive effect of 0.2%. M&A positively contributed 1.3%.

In North America, revenue per working day was down 10% (Q4 2022: down 5%). Growth in the US was down 11% (Q4 2022: down 6%), while Canada was down 7% YoY (Q4 2022: stable). In Northern Europe, revenue per working day was down by 6% (Q4 2022: up 4%). Revenue in the Netherlands was down 11% (Q4 2022: up 2%), while Germany was up 1% (Q4 2022: up 9%). Revenue growth in Belgium was down 8% (Q4 2022: down 2%). In Southern Europe, UK and Latin America, revenue was down 2% (Q4 2022: up 3%). Revenue in France was down 1% (Q4 2022: up 4%) and in Italy, revenue was down 3% (Q4 2022: up 4%). Revenue in Iberia was down 6% (Q4 2022: down 2%). In the Asia Pacific region, revenue was up by 4% (Q4 2022: up 9%); Japan increased by 3% (Q4 2022: up 11%), while Australia & New Zealand rose by 5% (Q4 2022: up 8%). Global Businesses revenue was up 2% YoY organically (Q4 2022: up 5%). Enterprise solutions revenue increased by 5% YoY (Q4 2022: up 8%), growing demand for outplacement and career mobility services more than offset decline in RPO. Monster revenue was down 14% YoY (Q4 2022: down 12%).

Perm fees decreased by 8% YoY (Q4 2022: up 1%). Perm fees in Northern Europe was up 17% YoY (Q4 2022: up 24%) and Southern Europe, UK and Latin America was up 2% (Q4 2022: up 7%). North American perm fees was down 22% YoY (Q4 2022: down 12%). In the Asia Pacific region, perm fees decreased by 18% (Q4 2022: down 7%). Perm fees made up 12.4% of gross profit.

Gross profit
In Q1 2023, gross profit amounted to € 1,368 million, down 2.1% YoY organically (Q4 2022: up 3.2%). Currency effects had a positive € 10 million impact on gross profit compared to Q1 2022.

Gross margin was 21.0% in the quarter, 50bp above Q1 2022 (as shown in the graph above). Temporary placements had a 40bp positive impact on gross margin (Q4 2022: 15bp positive impact). Permanent placements had a 10bp negative impact, while HRS/other had a 20bp positive impact.

Operating expenses
On an organic basis, operating expenses increased by € 25 million sequentially to € 1,102 million. Compared to last year, operating expenses were up 1% organically (Q4 2022: stable), while currency effects had a € 9 million negative impact.

Personnel expenses were up 1% sequentially. Average headcount (in FTE) amounted to 44,920 for the quarter, organically up 1% YoY and down 4% sequentially (net reduction of 1,840 FTE). Productivity (measured as gross profit per FTE) was down 3% YoY (Q4 2022: down 5%). We operated a network of 4,832 outlets end of period (Q4 2022: 4,905).

Operating expenses in Q1 2023 were adjusted for a total of € 37 millions of integration costs and one-offs (Q1 2022: € 6 million). This mainly reflects integration costs for our recent acquisitions and restructurings in a few countries.

Sander van ‘t Noordende, CEO of Randstad, commented: “I am pleased with the performance we delivered in the first quarter amid the continued challenging macroeconomic conditions across our markets. We have adapted well to this operating environment, and delivered growth in some markets. The improvement in our gross margin reflects a sustained focus on pricing and the mix of our different services, while our EBITA margin demonstrates strong cost management across our business.

We continue to benefit from our strong market position. We have deep customer relationships and are committed to building the best talent delivery engine in the market, with an excellent team in place to deliver on this. Our strong balance sheet enables us to capture the growth opportunities available to us, while we remain disciplined and able to adapt our operations as needed.

The trends we experienced in the first quarter have continued into early April and while we remain cautious, the prevailing trend of labor market scarcity remains across our markets. Our experienced teams, long track-record of delivery and execution in all environments, together with our strategy to be the partner of choice for talent and clients, gives us confidence as we look ahead.”

Source : first-quarter results 2023 (randstad.com)