Randstad Exceeds Earnings Forecasts Amid US Market Gains
By Michal Aleksandrowicz and Jakob Van Calster
(Reuters) -Dutch recruiter Randstad beat first-quarter core profit estimates, as improvement in the U.S. and stabilizing conditions in most regions offset difficulties in Germany and France, pushing its shares higher by 5% in early trade.
"We made some strategic moves, and that combined with our increased commercial activity, our focus on cost and our operational agility has all been paying off," company CEO Sander van 't Noordende told Reuters in an interview.
The world's largest employment agency reported earnings before interest, taxes and amortization (EBITA) before one-offs at 167 million euros ($190.3 million) in the first three months of the year, above the company-compiled consensus of 153 million euros.
Recruiters have flagged concerns about a worsening job market due to an escalating global trade war and Europe's economic struggles.
"In Q1, we haven't seen any major impact," the CEO responded when asked about tariffs.
However, Randstad's clients "are on the fence when it comes to making investment decisions, including hiring decisions," he said. "They are on alert and their radar is up."
In the U.S., the company saw further progress in the operational segment and return to growth in the digital one.
It flagged persisting difficult conditions in Germany and France and an adverse automotive impact in the former, with CFO Jorge Vazquez saying that the German industrial sector remains "very, very subdued".
When asked about EU defence spending, the CEO said they "have an action plan to go after the defence industry at large" and have identified the top 25 players in the market.
Randstad's gross margin of 19.3% in the first quarter beat the consensus of 19.1%. The company said the margin should be modestly lower due to seasonality in the second quarter.
Its operating expenses before one-offs were 925 million euros in comparison to the consensus of 920 million euros. They are expected to be broadly stable sequentially in the second quarter, the firm said.
($1 = 0.8778 euros)
(Reporting by Michal Aleksandrowicz and Jakob Van Calster; Editing by Mrigank Dhaniwala)
