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Research Tree provides access to ongoing research coverage, media content and regulatory news on RANDSTAD HOLDING NV. We currently have 10 research reports from 1 professional analysts.
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RANDSTAD HOLDING NV
RANDSTAD HOLDING NV
Strong organic revenue growth
14 Feb 17
Q4 16 was very strong with organic revenue growth of 6.6% (above expectation) and a good underlying EBITA margin (-0.1pt to 4.8% of revenue). The proposed ordinary dividend is up 13% to €1.89/share in cash, largely above expectations. Q4 16 figures: Revenue reached €5,525m (+10.6% including a +6.0% perimeter effect, a -0.3% currency impact). Organic revenue per working day growth was very strong (+6.6%, like in Q4 15) and was attributable to all geographic areas. The underlying EBITA (before one-offs) was €267.6m (+9%, +4% organically), corresponding to a margin rate of 4.8% (-0.1pt). All geographic areas contributed to the increase in underlying EBITA, excluding Germany (-16% to €23.3m) and the UK (-53% to €3.9m). Monster contributed to the group’s revenue and underlying EBITA by €82.2m and €3.5m respectively (two months integration). The reported EBITA (before amortisation of acquisition-related intangible assets) declined to €231.3m (-1%) after integration costs of €-10.5m in North America, the Netherlands, Germany (none in Q4 15) and higher one-off charges (€-25.8m vs €-10.8m in Q4 15). Operating profit was €197.9m (-4%) after higher amortisation of acquisition-related intangible assets (€-33.4m vs €-27.3m in Q4 15) due to Monster and a goodwill impairment of €-9.9m related to the operations in India. Net income was down to €152.6m (-13%) after lower net financial income (€0.3m vs €3m in Q4 15) which included an interest cost of €-4.8m and a gain of €3.9m on a fair-value adjustment related to Monster’s liabilities. FY2016 figures: Randstad Holding posted revenue of €20,684m (+8%). Organic revenue per working day grew by 5%. The positive trend remained solid vs 2015 (+6%). All goegraphic areas contributed to organic revenue growth. France (+7%), Iberia (+7%), Germany (+6%), Other European countries (+13%) and the RoW (+7%) were the most dynamic, but the Netherlands (+3%), Belgium/Luxembourg (+2%), the UK (+1%) and North America (+1%) were less so. Underlying EBITA increased to €946.7m (+10%, +7% organically) corresponding to a margin rate of 4.6% (+0.1pt), in line with our estimates. Reported EBITA was up to €892m (+7%) after integration costs of €-13.6m (none in 2015) and higher one-offs (€-41.1m vs €-29.9m in 2015). Net income was €588m (+13%) after lower amortisation of acquisition-related intangible assets (€-101m, -20%) and a net finance cost (-3.8m vs €-29.1m) which included a positive currency impact (€3.8m vs €-17.5m in 2015) and a higher effective tax rate (+0.5pt to 26%). The financial structure remained solid despite the acquisition of Monster. Net debt of €793m (vs €173m in 2015) represented 19% of shareholders’ equity. In 2016, there was a moderate decrease in operating cash flow (-1% to €560m) due to higher WCR, reflecting growth in activities and M&A, and an increase in income taxes paid (+52% to €160m). Taking into account higher net capex (€94m vs €63m in 2015, FCF was down to €465m (-7%). The other cash outflows included a significant net investment in shares (€709m) and the payment of the dividend (€320m on ordinary and preference shares).
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.
Strategic move in IT services and outsourced R&D
22 Jun 16
On 20 June 2016, Randstad Holding announced a cash tender offer for all the shares in Ausy, a listed French company specialised in the management of information systems and infrastructure and in outsourced R&D. Randstad Holding is offering €55/share in cash, €63.25/ORNANE, €39.1/BSAAR (exercise period ended on 20 October 2016). The board of directors of Ausy unanimously supports the tender offer and Ausy shareholders representing 40.3% of the shares (44% of the voting rights) have committed to tendering their shares to the offer. The offer price includes a premium of respectively 27.6% and 20% vs the last closing share price and the average share price in the last six months prior to the announcement. The completion of the offer is subject to a minimum acceptance of 65% of the voting rights on a fully diluted basis. In addition, the offer is subject to regulatory approval.
Move in digital transformation
14 Jun 16
Randstad Holding is active in the digital transformation. The group announced the acquisition of twago, which is a European online platform for freelance workers. Created in 2009 in Berlin, twago now has more than 500,000 registered workers (mainly programmers and designers) for freelance work and provides services for a fee (Logo designs, PHP Expert per Hour for web development projects, Translation from English to Chinese, amongst others). In July 2014, twago received funds from Randstad Innovation Fund (RIF) to invest in the development of the platform.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
21 Feb 17
Lighthouse Group* (LGT): Middle Britain growth (CORP) | Utilitywise* (UTW): Double-digit sales growth (CORP) | Trakm8* (TRAK): Earnings expectations cut again (CORP) | dotDigital* (DOTC): Myriad growth opportunities (CORP) | Artilium* (ARTA): Five-year Telenet deal secured and prepaid (CORP) | Netcall* (NET): Cloud investment pays off (CORP)
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.