Published by Global Banking and Finance Review
Posted on February 12, 2025
By Michal Aleksandrowicz and Johan BODINIER
(Reuters) -Randstad reported a quarterly core profit above market expectations on Wednesday and said its resilient business model and robust underlying performance would help it weather the tough market conditions also in the first quarter of 2025.
However, shares of the world's largest employment agency fell 3.4% by 0937 GMT, with analysts pointing to a bigger than expected organic revenue decline of 5.5% in the fourth quarter.
Financial and political upheaval in markets such as France, Germany and Britain has led employers to limit hiring and discouraged people from changing jobs. That, coupled with lower unemployment levels, has caused recruiters to put out gloomy forecasts and profit warnings in recent weeks.
Hiring and overall client confidence remain muted, Randstad said in a statement, while CEO Sander van't Noordende called the labour market "stuck" during a call with analysts.
The company said its organic revenue decline in January was in line with the drop seen in the fourth quarter, while volumes so far in the first quarter showed signs of stabilisation.
It also said the average headcount fell 4% organically in the fourth quarter of 2024 compared to a year earlier.
Earnings before interest, taxes and amortization (EBITA) before one-offs fell 24% to 200 million euros ($207 million) in the same period, but beat the 194 million expected by analysts' consensus.
"We took decisive action to strengthen the business - maintaining operational discipline, adapting the portfolio and reducing the cost base, while carefully balancing field capacity and strategic investments," van't Noordende said in the press release.
Randstad's net result swung to a loss of 149 million euros in the quarter, affected by a goodwill impairment for two operating segments as well as a fair value adjustment and impairments on its loans and financial commitments.
It proposed a dividend of 1.62 euros per share to be paid for 2024.
($1 = 0.9654 euros)
(Reporting by Michal Aleksandrowicz and Johan Bodinier in Gdansk; Editing by Milla Nissi)
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