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No deceleration currently

  • 26 Oct 16

In Q3 16, Randstad Holding benefited from strong organic revenue growth (+4.2% following +3.1% in Q2 16) and showed a slight improvement in the underlying EBITA margin (+0.1pt to 5.1% of revenue). Q3 16: Revenue reached €5,349m (+7.5%). Overall growth included a negative currency effect (-0.7%) and a positive change in perimeter (+4.5%). Organic revenue/working day was +4.2% (vs +5.4% in Q3 15). Gross profit increased to €999.8m (+7.1%, +3.3% organically) and the gross margin contracted very slightly to 18.7% of revenue (-0.1pt) due to the temp margin (-0.1pt) as a result of mix and price. EBITA (before the amortisation of acquisition-related intangible assets) increased to €260m (+7.6%) after integration costs of €-1.8m (vs none in Q3 15) and one-offs of €-9.1m (vs €-7.7m in Q3 15). Before these items, the underlying EBITA margin reached €270m (+8.7%, +5% organically) which corresponded to a margin rate of 5.1% of revenue (+0.1pt). The operating profit was €243m (+12.8%) after lower amortisation of intangible assets (€16.3m vs €25.5m in Q3 15). Some prior acquisition-related intangible assets were fully amortised during this quarter. Net income was €177m (+15.6%) after lower net financial costs (€-4.4m vs €-5.8m in Q3 15). 9 months 2016: Revenue reached €15,159m (+6.6%), gross profit was €2,828m (+6.7%) representing 18.7% of revenue, operating profit increased to €593m (+19%), and net profit was €436m (+27%). On 30 September 2016, net debt increased to €561m (vs €453m on 30 September 2015) and the net debt/EBITDA ratio of 0.6x (vs 0.5x on 30 September 2015) remained largely below the group’s target (max. 2.0x) and covenants (3.5x).

Agreement to "swallow" Monster

  • 10 Aug 16

Randstad Holding has announced an agreement to acquire all outstanding shares of Monster at $3.40/share in cash. Based on the purchase price, the enterprise value of Monster is approximately $429m and the EV/LTM adjusted EBITDA multiple is relatively high at 10.3x (8.9x excluding the stock-based compensation). The price paid includes a premium of 22.7% to the closing share price on 8 August 2016 and 30.1% to the 90-day volume weighted average stock price. The board of directors of Monster recommend that shareholders accept the tender offer launched by Randstad Holding. The completion of the operation due to be in Q4 16 does not have any financing condition and is subject to the regulatory approvals. Randstad Holding, which had net debt of €634m at the end of June 2016, will use its existing credit facilities to fund the transaction. When the acquisition is finalised, Monster should continue its activities as a separate and independent entity under its brand name. Monster Worldwide 2015 key figures were as follows: - Revenue of $667m (-8%, -3.7% on constant currency), o/w 71% in North America and 29% in Europe and Asia. Revenue was down 5.4% in the Careers-North America segment and dropped by 14% (-0.9% on constant currency) in the Careers-International segment. - “Adjusted” EBITDA of $107m (+25%) corresponding to 16% of revenue (+4.2pts). - Operating income of $9.1m after restructuring costs of $33m (vs an operating loss of $-336m after a goodwill impairment of $-326m in 2014). The restructuring measures include the reduction of the workforce of 300 associates, lease exit costs, some asset impairments and the decrease in office and general expenses. The annualised cost savings are estimated to be $40m. - Total net profit of $78m, o/w $13m from the continued operations and $64.5m from the discontinued operations (50% of the capital of JobKorea sold for $85m). - Financial gross debt of $199m and cash & cash equivalents of $168m at year-end 2015.

Organic revenue growth slowdown

  • 26 Jul 16

Randstad Holding had good figures in Q2 16 which included a slowdown in organic revenue growth (+3.1% after +5% in Q1 16) and a further improvement in the EBITA margin. Q2 16 earnings - Revenue reached €5,108m (+6%). Overall growth included a negative currency effect (-1.7%) and the acquisition of Proffice contributed positively (+2.4%). Organic revenue/working day was +3.1% (vs +6.7% in Q2 15). - Gross profit increased to €963m (+7%, +2% organically) and the gross margin improved slightly to 18.9% of revenue (+0.2pt) thanks to the impact of the temp margin and permanent placements (respectively +0.1pt and +0.2pt) which more than offset the negative effect of the decrease in the Dutch government payrolling activity. - Operating expenses increased to €724m (+5%, +3% organically). - Underlying EBITA was €240m (+11%, +10% organically) corresponding to a margin rate of 4.7% of revenue (+0.2pt). EBITA (before amortisation of acquisition-related intangible assets) increased to €235m (+11%) after integration costs/one-offs of €-4.3m (vs €-2.2m in Q2 15). - Operating profit was €214m (+20%) after lower amortisation of intangible assets to €-21m (vs €-34m in Q2 15). - Net income was €156m (+20%) after net financial costs of €-5m (vs €-4m in Q2 15) and a rather similar income tax rate (25.3%). H1 16 key data - Randstad Holding posted revenue of €9,810m (+6% and +4% organically). - The gross margin was rather stable at 18.6% reflecting an increase in North America, a positive impact of permanent placements and a negative price/mix effect in Europe and the Rest of World which affected the temp gross margin. - Underlying EBITA reached €409m (+11%) and reported EBITA was €401m (+12%) after lower integration/one-offs costs (€-7.5m vs €-11.4m in Q2 15). - Operating profit surged to €349m (+24%) after lower amortisation of intangible assets (€-52m vs €-74m in Q2 15). - Net income was €259m (+36%) after net financial result of €+0.3m (vs €-26m in Q2 15) and a stable income tax rate at 26%. The group had a slightly positive operating cash flow of €3.5m (vs €19m in H1 14), net capex of €27m (similar to last year). The purchase of own shares represented €24m and the dividend on ordinary and preference shares paid amounted to €94m. The group had strong operating cash flow at €88m (vs €3.5m in H1 15) thanks to higher EBITDA and lower WCR (improvement of the DSO from 51.2 days to 50.7 days). FCF was positive at €53m (vs €-23m in Q2 15) after net capex of €35m (+31%). Out-flows included the acquisition of Proffice and twago for €181m, the purchase of own shares for €14m and the dividend on ordinary and preference shares paid for a total of €320m. On 30 June 2016, net debt amounted to €634m (vs €575m on 30 June 2015 and €173m on 31 December 2015) and the net debt/EBITDA ratio was 0.7x (vs 0.7x on 30 June 2015 and 0.2x on 31 December 2015). The syndicated credit facility allows a leverage ratio of up to 3.5x while Randstad Holding’s internal goal is a maximum of 2x. The ROIC improved to 17.9% (vs 15.1% in H1 15) reflecting the increase in underlying EBITA and tight management of WCR.

In line with expectation

  • 26 Apr 16

Randstad Holding delivered satisfactory organic revenue growth (in line with expectation) driven by all geographic areas except for Belgium (large account losses), a slight improvement in the underlying EBITA margin and ended Q1 16 with low net debt. Q1 16 revenue and earnings Revenue was €4,701m (+6%). The overall growth rate included a positive perimeter effect of 1.7% related to the integration of Proffice (contribution of €68m). Organic revenue per working day increased by 5% (vs +5.6% in Q1 15) considering the fairly similar number of working days to last year. The gross profit of €865m grew at the same pace as total revenue (+6%) and included a negative currency effect of €-2.5m. Organic growth (+4%) was lower than at the topline considering the impact of the loss of the government payroll business in the Netherlands. All in all, the gross margin remained stable at 18.4% of revenue. Operating expenses were under control (+5% to €696m, +3% organically) and included a positive currency impact of €5m. Underlying EBITA (before amortisation of acquisition-related intangible assets) reached €169m (+10%) corresponding to a slight increase in the margin rate (+0.1pt to 3.6% of revenue). Proffice contributed €1.7m. The reported EBITA increased by 15% to €166m due to lower one-offs (€-3.1m vs €-9.2m in Q1 15 which corresponded to restructuring costs in the Netherlands). The operating profit surged to €135m (+30%) after lower amortization of acquisition-related intangible assets (€30m vs €40m in Q1 15). Net profit was €102.5m (vs €59.5m in Q1 15) after net financial income of €5m which included a positive currency effect of €+5m (vs net financial expenses of €-22m which included a negative currency impact of €-20m in Q1 15). Low net debt The operating cash flow increased to €76m (+55%) after a decrease in the change of WCR (€28m vs €59m in Q1 15) reflecting an improvement of the DSO (50.8 days, -0.7)and despite higher income taxes paid (€54m, +50%). FCF reached €62m (+73%). The significant investment in shares (€176m) mainly related to the acquisition of Proffice. Randstad Holding ended Q1 16 with lower net debt yoy (€296m vs €425m on 31 March 2015 and €173m on 31 December 2015). The net debt/EBITDA ratio was 0.3x (vs 0.5x on 31 March 2015 and 0.2x at year-end 2015).