08 May 2018Reading time: 3 minutes
Randstad is an early cyclical company and therefore used as an indicator for the overall economy. In August last year we wrote how all the lights were on green for further growth of the recruitment industry. This was confirmed by the results of Randstad that where recently presented.

Over the first three months of 2018 the company achieved growth in all their operating areas. The Dutch recruiter realizes approximately 17% of their revenue in North-America and 15% in The Netherlands, which are therefore their most important markets. However, the revenue growth in North-America was only 1% but was 9% in Europe and 11% in the rest of the world.

Over the first quarter of this year this finally resulted in a revenue growth of 7,4% to EUR 5.63 billion on an annual basis, while the EBITA over the same period increased with 4% to EUR 217 million and the EBITA margin was 3.8%.

The results are still showing the effects of the acquisition of Monster back in 2016. The costs of this take-over pulled down the organic growth of the gross profit, which was 4,5%. During the fourth quarter of 2017 the organic growth was at 7%. In the end Randstad achieved a net profit increase of 9% to EUR 217 million.

Randstad also claimed that the positive trend was continued in April, which according to the company is due to the implemented digitization strategy. According to several analysts this new strategy was necessary. Early May, ING claimed that platforms such as Deliveroo and Uber could threaten the recruitment industry and even could obtain 20-70% of the market. Recruitment websites but also social networks are already making the intervention of the flex-industry less needed. ING advices recruitment companies, job brokers and payrollers to create their own online platform. It seems that Randstad already anticipated on these developments with the acquisition of Monster.

The recruiter also benefits from the worldwide economic growth, although the Dutch job market slowly starting to shrink in several industries. This makes it more difficult for Randstad to find the right staff for their clients. The company still counts on a similar growth pace in the second quarter. It remains to be seen how the economic growth will develop itself in the coming period.

Investors responded a little disappointed on the recent results of Randstad, causing the stock price to drop to EUR 53.26 (03.05.2018).

The future stock price is subjected to several political, industrial and sector specific, as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Vontobel products on Randstad are tradable at DEGIRO.

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02/03/2021 09:58:37