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Randstad N.V. — Interim / Quarterly Report 2023
Apr 25, 2023
3880_iss_2023-04-25_538eff45-510a-4f74-88f2-b9bf93412610.pdf
Interim / Quarterly Report
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1st quarter results 2023.
human forward.
contents
Q1 2023: resilient performance, adapting to challenging conditions.
financial performance
performance
other information
Q1 2023: resilient performance, adapting to challenging conditions.
| Q1 2023 organic growth | ||
|---|---|---|
| -4.2% | ||
| Q1 2023 underlying EBITA | ||
| € 266m | ||
| Q1 2023 EBITA margin | ||
| 4.1% | ||
| gross profit -2% YoY; perm -8% & RPO -2% YoY, combined c. 19% of gross profit. |
strong gross margin of 21.0%, +50bp YoY, reflecting mix & pricing. |
solid EBITA margin, focused cost management. |
| rev. growth continued in asia pacific and latam, mixed trends in europe, decline in north america. |
sound balance sheet; DSO of 53.0; ROIC of 19.7%. |
in early April, trends broadly in line with Q1 2023. |
Sander van 't Noordende, CEO of Randstad, commented: "I am pleased with the performance we delivered in the first quarter amid the continued challenging macroeconomic conditions across our markets. We have adapted well to this operating environment, and delivered growth in some markets. The improvement in our gross margin reflects a sustained focus on pricing and the mix of our different services, while our EBITA margin demonstrates strong cost management across our business.
We continue to benefit from our strong market position. We have deep customer relationships and are committed to building the best talent delivery engine in the market, with an excellent team in place to deliver on this. Our strong balance sheet enables us to capture the growth opportunities available to us, while we remain disciplined and able to adapt our operations as needed.
The trends we experienced in the first quarter have continued into early April and while we remain cautious, the prevailing trend of labor market scarcity remains across our markets. Our experienced teams, long track-record of delivery and execution in all environments, together with our strategy to be the partner of choice for talent and clients, gives us confidence as we look ahead."
financial performance.
core data
| in millions of €, unless otherwise indicated - underlying | Q1 2023 |
Q1 2022 |
yoy change |
% org. |
|---|---|---|---|---|
| Revenue | 6,518 | 6,621 | (2)% | (4)% |
| Gross profit | 1,368 | 1,360 | 1% | (2)% |
| Operating expenses | 1,102 | 1,074 | 3% | 1% |
| EBITA, underlying1 | 266 | 286 | (7)% | (9)% |
| Integration costs and one-offs | (37) | (6) | ||
| EBITA | 229 | 280 | (18)% | |
| Amortization and impairment of intangible assets2 | (11) | (4) | ||
| Operating profit | 218 | 276 | ||
| Net finance costs | (14) | 5 | ||
| Share of profit of associates | - | - | ||
| Income before taxes | 204 | 281 | (27)% | |
| Taxes on income | (50) | (72) | ||
| Net income | 154 | 209 | (26)% | |
| Adj. net income for holders of ordinary shares3 | 191 | 214 | (11)% | |
| Free cash flow | 169 | 133 | 27% | |
| Net debt | 745 | 361 | 106% | |
| Leverage ratio (net debt/12-month EBITDA)4 | 0.5 | 0.2 | ||
| Leverage ratio (net debt/12-month EBITDA) excluding IFRS 165 | 0.1 | (0.2) | ||
| DSO (Days Sales Outstanding), moving average | 53.0 | 51.8 | ||
| Margins (in % of revenue) | ||||
| Gross margin | 21.0% | 20.5% | ||
| Operating expenses margin | 16.9% | 16.2% | ||
| EBITA margin, underlying | 4.1% | 4.3% | ||
| Share data | ||||
| Basic earnings per ordinary share (in €) | 0.83 | 1.13 | (27)% | |
| Diluted earnings per ordinary share, underlying (in €)3 | 1.04 | 1.16 | (10)% |
1 EBITA adjusted for integration costs and one-offs.
2 Amortization and impairment of acquisition-related intangible assets and goodwill.
3 Before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-offs. See table 'Earnings per share' on page 24.
4 Leverage ratio including IFRS 16.
5 Leverage ratio excluding IFRS 16, based on best estimates.
revenue
Organic revenue per working day declined by 4.2% YoY in Q1 2023 resulting in revenue of € 6,518 million (Q4 2022: up 2.4%). Reported revenue was down 1.6% YoY, of which working days had a positive impact of1.1% while FX had a positive effect of 0.2%. M&A positively contributed 1.3%.
In North America, revenue per working day was down 10% (Q4 2022: down 5%). Growth in the US was down 11% (Q4 2022: down 6%), while Canada was down 7% YoY (Q4 2022: stable). In Northern Europe, revenue per working day was down by 6% (Q4 2022: up 4%). Revenue in the Netherlands was down 11% (Q4 2022: up 2%), while Germany was up 1% (Q4 2022: up 9%). Revenue growth in Belgium was down 8% (Q4 2022: down 2%). In Southern Europe, UK and Latin America, revenue was down 2% (Q4 2022: up 3%). Revenue in France was down 1% (Q4 2022: up 4%) and in Italy revenue was down 3% (Q4 2022: up 4%). Revenue in Iberia was down 6% (Q4 2022: down 2%). In the Asia Pacific region, revenue was up by 4% (Q4 2022: up 9%); Japan increased by 3% (Q4 2022: up 11%), while Australia & New Zealand rose by 5% (Q4 2022: up 8%). Global Businesses revenue was up 2% YoY organically (Q4 2022: up 5%). Enterprise solutions revenue increased by 5% YoY (Q4 2022: up 8%), growing demand for outplacement and career mobility services more than offset decline in RPO. Monster revenue was down 14% YoY (Q4 2022: down 12%).
Perm fees decreased by 8% YoY (Q4 2022: up 1%). Perm fees in Northern Europe was up 17% YoY (Q4 2022: up 24%) and Southern Europe, UK and Latin America was up 2% (Q4 2022: up 7%). North American perm fees was down 22% YoY (Q4 2022: down 12%). In the Asia Pacific region, perm fees decreased by 18% (Q4 2022: down 7%). Perm fees made up 12.4% of gross profit.
gross profit
In Q1 2023, gross profit amounted to € 1,368 million, down 2.1% YoY organically (Q4 2022: up 3.2%). Currency effects had a positive € 10 million impact on gross profit compared to Q1 2022.
year-on-year gross margin development (%)
Gross margin was 21.0% in the quarter, 50bp above Q1 2022 (as shown in the graph above). Temporary placements had a 40bp positive impact on gross margin (Q4 2022: 15bp positive impact). Permanent placements had a 10bp negative impact, while HRS/other had a 20bp positive impact.
operating expenses
On an organic basis, operating expenses increased by € 25 million sequentially to € 1,102 million. Compared to last year, operating expenses were up 1% organically (Q4 2022: stable), while currency effects had a € 9 million negative impact.
sequential OPEX development Q4-> Q1 in € M
Personnel expenses were up 1% sequentially. Average headcount (in FTE) amounted to 44,920 for the quarter, organically up 1% YoY and down 4% sequentially (net reduction of 1,840 FTE). Productivity (measured as gross profit per FTE) was down 3% YoY (Q4 2022: down 5%). We operated a network of 4,832 outlets end of period (Q4 2022: 4,905).
Operating expenses in Q1 2023 were adjusted for a total of € 37 million of integration costs and one-offs (Q1 2022: € 6 million). This mainly reflects integration costs for our recent acquisitions and restructurings in a few countries.
EBITA
Underlying EBITA decreased organically by 9% YoY to € 266 million. Currency effects had a € 1 million positive impact YoY. EBITA margin reached 4.1% in the quarter, 20bp below Q1 2022. Overall, we achieved a 12% organic incremental conversion on a last four quarter basis in Q1 2023.
net finance costs
In Q1 2023, net finance costs were € 14 million, compared to € 5 million net finance income in Q1 2022. Interest expenses on our net debt position were € 6 million (Q1 2022: € 2 million), and interest expenses related to lease liabilities were € 6 million (Q1 2022: € 3 million). Foreign currency and other effects had a negative impact of € 2 million (Q1 2022: positive impact of € 10 million).
tax
The underlying effective tax rate before amortization and impairment of acquisition-related intangibles and goodwill, integration costs and one-offs amounted to 24.1% (Q1 2022: 25.8%). For FY 2023, we expect an effective tax rate before amortization and impairment of acquisition-related intangibles and goodwill, integration costs and one-offs of between 24% and 26%.
net income, earnings per share
In Q1 2023, adjusted net income was down 11% YoY to € 191 million. Diluted underlying EPS amounted to € 1.04 (Q1 2022: € 1.16). The average number of diluted ordinary shares outstanding for the quarter was 183.6 million (Q1 2022: 183.7 million).
invested capital
| in millions of €, unless otherwise indicated | mar 31 2023 |
dec 31 2022 |
sep 30 2022 |
jun 30 2022 |
mar 31 2022 |
dec 31 2021 |
|---|---|---|---|---|---|---|
| Goodwill and acquisition-related intangible assets | 3,251 | 3,280 | 3,414 | 3,180 | 3,112 | 3,088 |
| Operating working capital (OWC)1 | 1,257 | 1,239 | 1,320 | 1,238 | 1,102 | 997 |
| Net tax assets2 | 623 | 619 | 564 | 630 | 608 | 615 |
| All other assets/(liabilities)3 | 109 | 647 | 102 | 95 | (299) | 617 |
| Employed capital | 5,240 | 5,785 | 5,400 | 5,143 | 4,523 | 5,317 |
| Financed by | ||||||
| Total equity | 4,495 | 4,915 | 4,725 | 4,397 | 4,162 | 4,902 |
| (Net Cash)/Net debt excl. lease liabilities | 145 | 272 | 74 | 147 | (240) | (179) |
| Lease liabilities | 600 | 598 | 601 | 599 | 601 | 594 |
| Net debt incl. lease liabilities | 745 | 870 | 675 | 746 | 361 | 415 |
| Invested capital | 5,240 | 5,785 | 5,400 | 5,143 | 4,523 | 5,317 |
| Ratios | ||||||
| DSO (Days Sales Outstanding), moving average | 53.0 | 52.9 | 52.5 | 52.1 | 51.8 | 51.6 |
| OWC as % of revenue over last 12 months | 4.6% | 4.5% | 4.8% | 4.7% | 4.3% | 4.0% |
| Leverage ratio (net debt/12-month EBITDA) | 0.5 | 0.6 | 0.4 | 0.5 | 0.2 | 0.3 |
| Return on invested capital4 | 19.7% | 17.9% | 18.6% | 19.2% | 21.6% | 16.8% |
1 Operating working capital: Trade and other receivables minus the current part of financial assets, deferred receipts from disposed Group companies and interest receivable minus trade and other payables excluding interest payable.
2 Net tax assets: Deferred income tax assets and income tax receivables less deferred income tax liabilities and income tax liabilities.
3 All other assets/(liabilities), mainly containing property, plant & equipment, right of use assets, software plus financial assets and associates, less provisions and employee
benefit obligations and other liabilities. As at March 31, 2023, € 530 million dividends payable is included (September 30, and June 30, 2022 € 514 million).
4 Return on invested capital: underlying EBITA (last 12 months) less income tax paid (last 12 months) as percentage of invested capital.
Return on invested capital (ROIC) amounted to 19.7%, a decrease of190bp YoY. This is mainly a reflection of the dividend announcement, partially offset by a YoY improvement of our 12-month rolling EBITA.
The moving average of Days Sales Outstanding (DSO) was 53.0 (Q4 2022: 52.9).
At the end of Q1 2023, net debt including lease liabilities was € 745 million, compared to € 361 million at the end of Q1 2022. A further analysis of the cash flow is provided in the next section.
cash flow summary
| in millions of € | Q1 2023 | Q1 2022 | change |
|---|---|---|---|
| EBITA | 229 | 280 | (18)% |
| Depreciation, amortization and impairment of property, plant, equipment, right-of-use assets, and software |
72 | 73 | |
| EBITDA | 301 | 353 | (15)% |
| Operating working capital | (27) | (88) | |
| Provisions and employee benefit obligations | 8 | 4 | |
| All other items | 23 | 10 | |
| Income taxes | (51) | (69) | |
| Net cash flow from operating activities | 254 | 210 | 21% |
| Net capital expenditures | (22) | (25) | |
| Financial assets | (11) | - | |
| Repayments of lease liabilities | (52) | (52) | |
| Free cash flow | 169 | 133 | 27% |
| Net (acquisitions)/disposals | (1) | ||
| Net purchase of own ordinary shares | (36) | (71) | |
| Net finance costs paid | (5) | (3) | |
| Translation and other effects | (2) | (5) | |
| Net decrease of net debt (incl. lease liabilities) | 125 | 54 | |
In the quarter, free cash flow amounted to € 169 million, up € 36 million YoY (Q1 2022: € 133 million). Free cash flow mainly reflects the movement of working capital year over year, partially offset by the decline in EBITA.
performance.
performance by segment
split by segment
Q1 2023: revenue € 6,518 million Q1 2023: EBITA €266 million
North America Northern Europe Southern Europe, UK & Latin America Asia Pacific Global Businesses
| revenue in millions of € | Q1 2023 | Q1 2022 | organic ∆%1 |
|---|---|---|---|
| North America | 1,213 | 1,302 | (10)% |
| Netherlands | 806 | 886 | (11)% |
| Germany | 498 | 488 | 1% |
| Belgium/Luxembourg | 391 | 415 | (8)% |
| Other NE Countries | 369 | 372 | 0% |
| Northern Europe | 2,064 | 2,161 | (6)% |
| France | 949 | 941 | (1)% |
| Italy | 538 | 543 | (3)% |
| Iberia | 373 | 392 | (6)% |
| Other SE Countries, UK & Latam | 363 | 352 | 1% |
| Southern Europe, UK & Latin America | 2,223 | 2,228 | (2)% |
| Asia Pacific | 647 | 571 | 4% |
| Global Businesses | 371 | 359 | 2% |
| Revenue | 6,518 | 6,621 | (4)% |
1 Organic change is measured excluding the impact of currencies, acquisitions, disposals, and reclassifications. Forrevenue, the organic change has been adjusted forthe number of working days.
| EBITA in millions of €, underlying | Q1 2023 | EBITA margin1 | Q1 2022 | EBITA margin1 | organic ∆%2 |
|---|---|---|---|---|---|
| North America | 57 | 4.7% | 82 | 6.3% | (33)% |
| Netherlands | 52 | 6.4% | 58 | 6.5% | (10)% |
| Germany | 16 | 3.2% | 6 | 1.3% | 152% |
| Belgium/Luxembourg | 18 | 4.7% | 20 | 4.8% | (8)% |
| Other NE Countries | 12 | 3.3% | 14 | 3.6% | (6)% |
| Northern Europe | 98 | 4.8% | 98 | 4.5% | 1% |
| France | 53 | 5.6% | 49 | 5.3% | 10% |
| Italy | 39 | 7.2% | 41 | 7.5% | (6)% |
| Iberia | 22 | 5.7% | 19 | 4.8% | 15% |
| Other SE Countries, UK & Latam | 11 | 2.9% | 8 | 2.4% | 21% |
| Southern Europe, UK & Latin America | 125 | 5.6% | 117 | 5.3% | 6% |
| Asia Pacific | 31 | 4.8% | 31 | 5.4% | (13)% |
| Global Businesses | 2 | 0.7% | (1) | (0.3)% | 314% |
| Corporate | (47) | (41) | |||
| EBITA before integration costs and one-offs3 | 266 | 4.1% | 286 | 4.3% | (9)% |
| Integration costs and one-offs | (37) | (6) | |||
| EBITA | 229 | 280 |
1 EBITA in % of total revenue per segment.
2 Organic change is measured excluding the impact of currencies, acquisitions, disposals, and reclassifications. Forrevenue, the organic change has been adjusted forthe number of working days.
north america
In North America, revenue was down 10% YoY (Q4 2022: down 5%). Perm fees were down 22% YoY (Q4 2022: down 12%). In Q1 2023, revenue of our combined US businesses was down 11% YoY (Q4 2022: down 6%). US Staffing/Inhouse Services was down 15% YoY (Q4 2022: down 10%). US Professionals revenue was down 4% YoY (Q4 2022: up 1%). In Canada, revenue was down 7% YoY (Q4 2022: stable). EBITA margin for the region came in at 4.7% for the quarter, compared to 6.3% last year.
northern europe
In the Netherlands, revenue was down 11% (Q4 2022: up 2%). Overall perm fees were up 1% YoY (Q4 2022: up 30%). Our combined Staffing and Inhouse Services business was down 10% YoY (Q4 2022: down 2%), while our Professionals business was down 13% YoY (Q4 2022: up 21%). EBITA margin in the Netherlands was 6.4%, compared to 6.5% last year.
In Germany, revenue per working day was up 1% YoY (Q4 2022: up 9%). Perm fees were up 39% compared to last year (Q4 2022: up 40%). Our combined Staffing/Inhouse Services business was up 1% YoY (Q4 2022: up 9%), while Professionals was down 2% YoY (Q4 2022: up 9%). EBITA margin in Germany was 3.2%, compared to 1.3% last year.
In Belgium & Luxembourg, revenue was down 8% YoY (Q4 2022: down 2%). Our Staffing/Inhouse Services business was down 10% (Q4 2022: down 5%). EBITA margin was 4.7%, compared to 4.8% last year.
Across other Northern Europe countries, revenue per working day was stable YoY (Q4 2022: up 8%). In the Nordics, revenue was down 1% YoY (Q4 2022: up 6%), while in Switzerland, revenue was up 2% YoY (Q4 2022: up 1%). Revenue in Poland business was down 10% (Q4 2022: up 7%). EBITA margin for this region was 3.3% compared to 3.6% last year.
southern europe, uk & latin america
In France, revenue was down 1% YoY (Q4 2022: up 4%). Perm fees were up 9% compared to last year (Q4 2022: up 20%). Staffing/Inhouse Services revenue was down 6% YoY (Q4 2022: down 1%), while our Professionals business was up 10% YoY (Q4 2022: up 19%). EBITA margin was 5.6% compared to 5.3% last year.
Revenue per working day in Italy was down 3% YoY (Q4 2022: up 4%). Overall perm fees were up 8% YoY (Q4 2022: up 11%). EBITA margin was 7.2%, compared to 7.5% last year.
In Iberia, revenue per working day was down 6% YoY (Q4 2022: down 2%). Perm fees were up 6% compared to last year (Q4 2022: up 9%). Staffing/Inhouse Services combined was down 6% YoY (Q4 2022: down 3%). Spain was down 8% YoY (Q4 2022: down 4%), while in Portugal revenue was stable YoY (Q4 2022: up 6%). EBITA margin was 5.7%, compared to 4.8% last year.
Across other Southern Europe countries, UK & Latin America, revenue per working day was up 1% YoY (Q4 2022: up 9%). In the UK, revenue was down 3% YoY (Q4 2022: up 6%), while in Latin America revenue was up 13% (Q4 2022: up 17%). EBITA margin for this region was 2.9% compared to 2.4% last year.
asia pacific
Total revenue in the Asia Pacific region increased by 4% organically YoY (Q4 2022: up 9%). In Japan, revenue grew 3% YoY (Q4 2022: up 11%). Revenue in Australia/New Zealand was up 5% YoY (Q4 2022: up 8%), while revenue in China decreased by 7% YoY (Q4 2022: down 18%). Our business in India was up 8% YoY (Q4 2022: up 15%). Overall EBITA margin in this region was 4.8%, compared to 5.4% last year.
global businesses
Total organic revenue growth per working day was up 2% YoY (Q4 2022: up 5%). Enterprise solutions revenue increased by 5% YoY (Q4 2022: up 8%), while Monster revenue was down 14% YoY (Q4 2022: down 12%). EBITA margin came in at 0.7% compared to -0.3% last year.
performance by revenue category
| revenue in millions of € | Q1 2023 | Q1 2022 | organic ∆%1 |
|---|---|---|---|
| Staffing | 2,929 | 3,165 | (8)% |
| Inhouse Services | 1,660 | 1,612 | 1% |
| Professionals | 1,558 | 1,485 | (1)% |
| Global Businesses | 371 | 359 | 2% |
| Revenue | 6,518 | 6,621 | (4)% |
1 Organic change is measured excluding the impact of currencies, acquisitions, disposals, and reclassifications. Forrevenue, the organic change has been adjusted forthe number of working days.
Total revenue of permanent placements in the revenue categories 'Staffing', 'Inhouse', and 'Professionals', amounted to € 170 million in Q1 2023 (Q1 2022: € 183 million). Revenue of recruitment process outsourcing within Global businesses amounted to € 99 million in Q1 2023 (Q1 2022: € 98 million).
other information.
outlook
Q1 2023 revenue per working day decreased by 4.2% YoY organically.
Macro economic environment remained challenging across our markets, which translated into lower hiring activities from our clients. This trend continued into early April, whereby the YoY growth rate of employees working was in line with the Q1 2023 YoY growth rate.
Q2 2023 gross margin and operating expenses are both expected to be broadly in line sequentially. We remain cautious and are mindful of the volatility we are operating in, and we continue to work with scenario planning to ensure adaptability.
Visibility remains limited. Randstad will continue to respond quickly and effectively, through our diverse portfolio of services, and operational adaptability provided by our field steering model.
There will be a negative 0.4 working day impact in Q2 2023.
other items
Randstad commences its € 400 million share buyback program with the first tranche Randstad N.V. ("Randstad") today commences the € 400 million share buyback program as announced on February 14, 2023.
The purpose ofthe program is to reduce the capital of Randstad, by canceling all ofthe ordinary shares acquired through the program.
The program will be executed under the mandate given by the Annual General Meeting of Shareholders on March 28, 2023 ("AGM 2023") and within the limits of relevant laws and regulations.
The share buyback program will be executed in several tranches. For each of them, an intermediary will be mandated to execute the purchase of the shares independently of Randstad in compliance with the Market Abuse Regulation ("MAR") and within predefined execution parameters. Randstad shares are purchased in the market and accumulated in treasury until cancellation. Pursuant to the relevant rules and regulations, cancellation may not be affected earlier than two months after a resolution to cancel shares is adopted and publicly announced.
Randstad will commence the first tranche of its € 400 million full share buyback program, to repurchase up to a maximum of 1,550,000 ordinary shares in Randstad in the period between April 25, 2023 and July 24, 2023 (inclusive), equivalent to around € 80 million based on the closing share price on Euronext Amsterdam on April 24, 2023. Within the limits set at the AGM 2023, the maximum price to be paid for shares will be 110% of the closing price of the one preceding trading day on the Euronext Amsterdam stock exchange. Any purchases of shares will be carried out on Euronext Amsterdam in accordance with certain pre-set parameters in accordance with Article 5(1) of Regulation EU No 596/2014.
Randstad has mandated ABN AMRO Bank to undertake the first tranche of the program between April 25, 2023 and July 24, 2023 (inclusive). ABN AMRO Bank will make its trading decisions with regard to the number of shares to be purchased and the timing of the purchases independently of Randstad, and any shares so purchased will be on-sold by ABN AMRO Bank to Randstad. ABN AMRO Bank's instruction to purchase the shares is irrevocable.
Randstad will provide weekly updates on the progress of the program on its corporate website in the investor relations section and to the AFM. Once the maximum number of shares has been repurchased, Randstad will immediately disclose the finalization of the first tranche of its € 400 million full share buyback program.
Next to the € 400 million share buyback program, Randstad intends to offset the dilutive effect from the performance share plans for senior management through share buybacks. Further details will be announced in the Q3 2023 results press release.
working days
| Q1 | Q2 | Q3 | Q4 | |
|---|---|---|---|---|
| 2023 | 63.9 | 61.7 | 63.8 | 62.2 |
| 2022 | 63.2 | 62.1 | 64.8 | 62.7 |
| 2021 | 62.4 | 62.2 | 65.1 | 63.9 |
financial calendar
| Publication of second quarter results 2023 | July 25, 2023 |
|---|---|
| Publication of third quarter results 2023 | October 24, 2023 |
analyst and press conference call
Today (April 25, 2023), at 09.00 AM CET, Randstad N.V. will be hosting an analyst conference call. The dial-in numbers are:
-
International: +44 33 0551 0200
-
Netherlands: +31 20 708 5073
To gain access to the conference please tap or state the password 'Randstad'
You can listen to the call through a real-time audio webcast. You can access the webcast and presentation at https:// www.randstad.com/results-and-reports/quarterly-results. A replay of the presentation and the Q&A will be available on our website by the end of the day.
For more information please contact:
Bisera Grubesic - Director Investor Relations [email protected] or (mobile) +31 (0)6 2088 2592 Akshay Lachmandas - Investor Relations Officer [email protected] or (mobile) +31 (0)6 3918 6117 Elise Martin-Davies - Global Media Relations Lead [email protected] or (mobile) +31 (0)6 1322 5136
disclaimer
Certain statements in this document concern prognoses about the future financial condition, risks, investment plans, and the results of operations of Randstad N.V. and its operating companies, as well as certain plans and objectives. Obviously, such prognoses involve risks and a degree of uncertainty, since they concern future events and depend on circumstances that will apply then. Many factors may contribute to the actual results and developments differing from the prognoses made in this document. These factors include, but are not limited to, general economic conditions, shortages on the job market, changes in the demand for personnel (including flexible personnel), achievement of cost savings, changes in the business mix, changes in legislation (particularly in relation to employment, staffing and tax laws), the role of industry regulators, future currency and interest fluctuations, availability of credit on financially acceptable terms, the successful completion of company acquisitions and their subsequent integration, successful disposals of companies, the rate of technological developments, the impact of pandemics and our ability to identify otherrelevantrisks and mitigate theirimpact. These prognoses therefore apply only on the date on which this document was compiled. The quarterly results as presented in this press release are unaudited.
randstad profile
Randstad is the world's largest talent company and a partner of choice to clients. We are committed to providing equitable opportunities to people from all backgrounds and help them remain relevant in the rapidly changing world of work. We have a deep understanding of the labor market and help our clients to create the high-quality, diverse and agile workforces they need to succeed. Our 46,000 employees around the world make a positive impact on society by helping people to realize their true potential throughout their working life.
Randstad was founded in 1960 and is headquartered in Diemen, the Netherlands. In 2022, in our 39 markets, we helped more than 2 million people find a job that feels good and advised over 230,000 clients on their talent needs. We generated revenue of €27.6 billion. Randstad N.V. is listed on the Euronext Amsterdam. For more information, see www.randstad.com.
interim financial statements.
actuals
consolidated income statement
| in millions of €, unless otherwise indicated | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | 6,518 | 6,621 |
| Cost of services | 5,150 | 5,261 |
| Gross profit | 1,368 | 1,360 |
| Selling expenses | 750 | 734 |
| General and administrative expenses | 389 | 346 |
| Operating expenses | 1,139 | 1,080 |
| Amortization and impairment of acquisition-related intangible assets and goodwill | 11 | 4 |
| Total operating expenses | 1,150 | 1,084 |
| Operating profit | 218 | 276 |
| Net finance costs | (14) | 5 |
| Share of profit of associates | - | - |
| Income before taxes | 204 | 281 |
| Taxes on income | (50) | (72) |
| Net income | 154 | 209 |
| Net income attributable to: | ||
| Holders of ordinary shares Randstad N.V. | 152 | 207 |
| Holders of preference shares Randstad N.V. | 2 | 2 |
| Equity holders | 154 | 209 |
| Non-controling interests | - | - |
| Net Income | 154 | 209 |
| Earnings per share attributable to the holders of ordinary shares of Randstad N.V. (in € per share): | ||
| Basic earnings per share | 0.83 | 1.13 |
| Diluted earnings per share | 0.83 | 1.13 |
| Diluted earnings per share before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-offs |
1.04 | 1.16 |
informationbygeographicalareaandrevenuecategory
revenue by geographical area
| in millions of € | Q1 2023 | Q1 20221 |
|---|---|---|
| North America | 1,213 | 1,302 |
| Netherlands | 808 | 888 |
| Germany | 498 | 488 |
| Belgium/Luxembourg | 391 | 416 |
| Other NE Countries | 372 | 372 |
| Northern Europe | 2,069 | 2,164 |
| France | 950 | 941 |
| Italy | 538 | 543 |
| Iberia | 374 | 393 |
| Other SE Countries, UK & Latam | 365 | 355 |
| Southern Europe, UK & Latin America | 2,227 | 2,232 |
| Asia Pacific | 648 | 572 |
| Global Businesses | 374 | 363 |
| Elimination of intersegment revenue | (13) | (12) |
| Revenue | 6,518 | 6,621 |
1 2022 has been restated due to changes in the external reporting structure. Refer to the notes to the consolidated interim financial statements for further detail.
EBITA by geographical area
| in millions of € | Q1 2023 | Q1 20221 |
|---|---|---|
| North America | 52 | 81 |
| Netherlands | 52 | 58 |
| Germany | 14 | 5 |
| Belgium/Luxembourg | 18 | 19 |
| Other NE Countries | 11 | 13 |
| Northern Europe | 95 | 95 |
| France | 53 | 49 |
| Italy | 39 | 41 |
| Iberia | 21 | 19 |
| Other SE Countries, UK & Latam | 10 | 8 |
| Southern Europe, UK & Latin America | 123 | 117 |
| Asia Pacific | 17 | 31 |
| Global Businesses | (8) | (2) |
| Corporate | (50) | (42) |
| EBITA | 229 | 280 |
1 2022 has been restated due to changes in the external reporting structure. Refer to the notes to the consolidated interim financial statements for further detail.
revenue by revenue category
| in millions of € | Q1 2023 | Q1 20221 |
|---|---|---|
| Staffing | 2,939 | 3,173 |
| Inhouse | 1,660 | 1,612 |
| Professionals | 1,558 | 1,485 |
| Global businesses | 374 | 363 |
| Elimination of intersegment revenue | (13) | (12) |
| Revenue | 6,518 | 6,621 |
1 2022 has been restated due to changes in the external reporting structure. Refer to the notes to the consolidated interim financial statements for further detail.
Total revenue of permanent placements in the revenue categories 'Staffing', 'Inhouse', and 'Professionals', amounted to € 170 million in Q1 2023 (Q1 2022: € 183 million). Revenue of recruitment process outsourcing within Global businesses amounted to € 99 million in Q1 2023 (Q1 2022: € 98 million).
consolidated balance sheet
| in millions of € | march 31, 2023 | december 31, 2022 |
march 31, 2022 |
|---|---|---|---|
| assets | |||
| Property, plant and equipment | 146 | 153 | 150 |
| Right-of-use assets | 526 | 524 | 518 |
| Intangible assets | 3,369 | 3,397 | 3,224 |
| Deferred income tax assets | 622 | 633 | 606 |
| Financial assets and associates | 188 | 184 | 194 |
| Non-current assets | 4,851 | 4,891 | 4,692 |
| Trade and other receivables | 5,559 | 5,828 | 5,579 |
| Income tax receivables | 131 | 116 | 117 |
| Cash and cash equivalents | 340 | 274 | 548 |
| Current assets | 6,030 | 6,218 | 6,244 |
| Total assets | 10,881 | 11,109 | 10,936 |
| equity and liabilities | |||
| Issued capital | 26 | 26 | 26 |
| Share premium | 2,330 | 2,330 | 2,323 |
| Reserves | 2,138 | 2,558 | 1,812 |
| Shareholders' equity | 4,494 | 4,914 | 4,161 |
| Non-controlling interests | 1 | 1 | 1 |
| Total equity | 4,495 | 4,915 | 4,162 |
| Borrowings (including lease liabilities) | 865 | 889 | 685 |
| Deferred income tax liabilities | 44 | 52 | 20 |
| Provisions and employee benefit obligations | 220 | 219 | 269 |
| Other liabilities | 8 | 7 | - |
| Non-current liabilities | 1,137 | 1,167 | 974 |
| Borrowings (including lease liabilities) | 220 | 255 | 224 |
| Trade and other payables | 4,289 | 4,576 | 4,466 |
| Dividend | 530 | - | 922 |
| Income tax liabilities | 86 | 78 | 95 |
| Provisions and employee benefit obligations | 124 | 118 | 89 |
| Other liabilities | - | - | 4 |
| Current liabilities | 5,249 | 5,027 | 5,800 |
| Total liabilities | 6,386 | 6,194 | 6,774 |
| Total equity and liabilities | 10,881 | 11,109 | 10,936 |
consolidated statement of cash flows
| in millions of € | Q1 2023 | Q1 2022 |
|---|---|---|
| Operating profit | 218 | 276 |
| Amortization and impairment of acquisition-related intangible assets and goodwill | 11 | 4 |
| EBITA | 229 | 280 |
| Depreciation, amortization and impairment of property, plant, equipment, right-of-use assets, and software | 72 | 73 |
| EBITDA | 301 | 353 |
| Provisions and employee benefit obligations | 8 | 4 |
| Share-based compensations | 16 | 11 |
| Other items | 7 | (1) |
| Cash flow from operations before operating working capital and income taxes | 332 | 367 |
| Operating working capital assets | 235 | (104) |
| Operating working capital liabilities | (262) | 16 |
| Operating working capital | (27) | (88) |
| Income taxes | (51) | (69) |
| Net cash flow from operating activities | 254 | 210 |
| Net additions in property, plant and equipment, and software | (22) | (25) |
| Acquisition of subsidiaries, associates and equity investments | (1) | (2) |
| Disposal of subsidiaries, associates and equity investments | - | 2 |
| Loans and receivables | (11) | - |
| Net cash flow from investing activities | (34) | (25) |
| Net purchase of own ordinary shares | (36) | (71) |
| Drawings on non-current borrowings | 227 | - |
| Repayments of non-current borrowings | (250) | (400) |
| (repayment)/drawing current borrowings | (33) | 22 |
| Repayments of lease liabilities | (52) | (52) |
| Net financing | (144) | (501) |
| Net finance costs paid | (5) | (3) |
| Net reimbursement to financiers | (5) | (3) |
| Net cash flow from financing activities | (149) | (504) |
| Net increase (decrease) in cash, and cash equivalents | 71 | (319) |
| Cash, and cash equivalents at beginning of period | 274 | 859 |
| Net movement | 71 | (319) |
| Translation and currency gains | (5) | 8 |
| Cash, and cash equivalents at end of period | 340 | 548 |
| Free cash flow | 169 | 133 |
consolidated statement of changes in total equity and consolidatedstatementoftotalcomprehensiveincome
| January 1 - March 31 | |||
|---|---|---|---|
| in millions of € | 2023 | 2022 | |
| Begin of period | |||
| Shareholders' equity | 4,914 | 4,901 | |
| Non-controlling interests | 1 | 1 | |
| Total equity | 4,915 | 4,902 | |
| Net income for the period, equity shareholders | 154 | 209 | |
| Non-controlling interest | - | - | |
| Net income for the period | 154 | 209 | |
| Items that subsequently may be reclassified to the income statement | (27) | 29 | |
| Items that will never be reclassified to the income statement | - | - | |
| Total other comprehensive income, net of taxes | (27) | 29 | |
| Total comprehensive income | 127 | 238 | |
| Dividend payable on ordinary shares | (522) | (914) | |
| Dividend payable on preference shares | (8) | (8) | |
| Share-based compensations | 16 | 11 | |
| Tax on share-based compensations | 3 | 4 | |
| Net purchase of ordinary shares | (36) | (71) | |
| Total other changes in period | (547) | (978) | |
| End of period | 4,495 | 4,162 | |
| Shareholder's equity | 4,494 | 4,161 | |
| Non-controlling interests1 | 1 | 1 | |
| Total equity | 4,495 | 4,162 | |
1 Changes in 'Non-controlling interests', are negligible for all periods.
notes to the consolidated interim financial statements
reporting entity
Randstad N.V. is a public limited liability company incorporated and domiciled in the Netherlands and listed on Euronext Amsterdam.
The consolidated interim financial statements of Randstad N.V. as at and for the three month period ended March 31, 2023 include the company and its subsidiaries (together called 'the Group').
significant accounting policies
These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (hereinafter: IFRS).
The accounting policies applied by the Group in these consolidated interim financial statements are unchanged from those applied by the Group in its consolidated financial statements as at and for the year ended December 31, 2022.
basis of presentation
These consolidated interim financial statements have been condensed and prepared in accordance with (IFRS) IAS 34 'Interim Financial Reporting'; they do not include all the information required for full (i.e., annual) financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended December 31, 2022.
The consolidated financial statements of the Group as at and for the year ended December 31, 2022 are available upon request at the Company's office or on www.randstad.com.
estimates
The preparation of consolidated interim financial statements requires the Group to make certain judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.
In preparing these consolidated interim financial statements, the significant judgments, estimates, and assumptions are the same as those applied to the consolidated financial statements as at and for the year ended December 31, 2022.
new external segmentation
As of January 1, 2023, a new Executive Leadership Team was appointed along with changes in the governance and managerial reporting structure of the Group. As a result, the segmentation by geographical area has changed from the way it was presented in the FY 2022 annual report. Main changes are the creation of 'Northern Europe' and 'Southern Europe, UK & Latin America' segments. The countries included as part of the former 'Rest of Europe' segment have been allocated to both of these segments accordingly. Similarly, the former 'Rest of World' segment has been split between Latin American countries, included as part of the new 'Southern Europe, UK and Latin America' segment, and the remaining countries which are included in the new 'Asia Pacific' segment.
Compared to the FY 2022 annual report, the segmentation by revenue categories also includes minor changes to better reflect the allocation of revenue between 'Staffing' and 'Global Businesses' segments.
Comparative figures for prior periods have been adjusted accordingly for presentation purposes.
conflict in Ukraine
We closely follow the geopolitical developments in Eastern Europe. In addition to the human toll, we recognize that increased inflation and increased energy prices, and supply-chain disruptions are signs indicating that this war is affecting the global economy.
So far, the impact of the consequences of the war on our results has been fairly limited. Looking ahead, there continues to be a high degree of global macroeconomic and geopolitical uncertainty. We are continuously monitoring the situation, with the aim to respond as quickly and effectively as possible to the changing circumstances.
seasonality
The Group's activities are affected by seasonal patterns. The volume of transactions throughout the year fluctuates per quarter, depending on demand as well as on variations in items such as the number of working days, public holidays and holiday periods. The Group usually generates its strongest revenue and profits in the second half of the year, while the cash flow in the second quarteris usually negative due to the timing of payments of dividend and holiday allowances; cash flow tends to be strongest in the second half of the year.
effective tax rate
The effective tax rate for the three month period ended March 31, 2023 is 24.5% (Q1 2022: 25.6%) and is based on the estimated tax rate for the whole year 2023 (FY 2022: 17.5%). Last year's tax rate was significantly impacted by the reassessment of the valuation of our tax loss carry forward position in Luxembourg.
acquisition and disposal of group companies, equity investments and associates
In the quarter, we had no cash outflow relating to acquisitions of Group companies (Q1 2022: € 2 million cash outflow).During the quarter, we finalized the purchase price allocation for our acquisition of Avanzo (Spain). In the quarter, we had a cash outflow of € 1 million relating to the payment of deferred payments. In Q1 2023, we had no disposal of Group companies (Q1 2022: no disposals). In the quarter, we had no disposal of equity investments (Q1 2022: € 2 million cash inflow).
shareholders' equity
| Issued number of ordinary shares | 2023 | 2022 |
|---|---|---|
| January 1 | 183,959,312 | 183,959,312 |
| Share-based compensations | - | - |
| Dec 31 | 183,959,312 | 183,959,312 |
As at March 31, 2023, the Group held 951,816 treasury shares (March 31, 2022: 1,133,058). The average number of (diluted) ordinary shares outstanding has been adjusted for these treasury shares.
As at March 31 2023, December 31 2022 and March 31, 2022 the number of issued preference shares was 25,200,000 (type B) and 50,130,352 (type C).
earnings per share
| in millions of €, unless otherwise indicated | Q1 2023 | Q1 2022 |
|---|---|---|
| Net income for holders of preference and ordinary shares | 154 | 209 |
| Net income attributable to holders of preference shares | (2) | (2) |
| Net income attributable to holders of ordinary shares | 152 | 207 |
| Amortization of intangible assets1 | 11 | 4 |
| Integration costs and one-offs | 37 | 6 |
| Tax effect on amortization, integration costs, and one-offs | (9) | (3) |
| Adjusted net income for holders of ordinary shares | 191 | 214 |
| Average number of ordinary shares outstanding | 182.9 | 182.8 |
| Average number of diluted ordinary shares outstanding | 183.6 | 183.7 |
| Earnings per share attributable to the holders of ordinary shares of Randstad N.V. (in € per share): | ||
| Basic earnings per share | 0.83 | 1.13 |
| Diluted earnings per share | 0.83 | 1.13 |
| Diluted earnings per share before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs, and one-offs2 |
1.04 | 1.16 |
1 Amortization and impairment of acquisition-related intangible assets and goodwill.
2 Diluted EPS underlying
net debt position
Net debt including lease liabilities at March 31, 2023 amounted to € 745 million, and was € 384 million higher compared to March 31, 2022 (€ 361 million). The net debt position excluding lease liabilities as at March 31, 2023 was € 145 million compared to the net cash position as at March 31, 2022 (€ 240 million).
breakdown of operating expenses
| in millions of € | Q1 2023 | Q1 2022 |
|---|---|---|
| Personnel expenses | 867 | 815 |
| Other operating expenses | 272 | 265 |
| Operating expenses | 1,139 | 1,080 |
depreciation, amortization, impairment of property, plant, equipment, right-of-use assets and software
| in millions of € | Q1 2023 | Q1 2022 |
|---|---|---|
| Depreciation and impairment of property, plant and equipment | 14 | 13 |
| Amortization and impairment of software | 11 | 14 |
| Depreciation and amortization of software | 25 | 27 |
| Depreciation and impairment of right-of-use assets | 47 | 46 |
| Total | 72 | 73 |
net additions to property, plant, equipment and software, statement of cash flows
| in millions of € | Q1 2023 | Q1 2022 |
|---|---|---|
| Additions | ||
| Property, plant and equipment & Software | (22) | (27) |
| (22) | (27) | |
| Disposals | ||
| Proceeds property, plant and equipment | - | 2 |
| (Profit)/Loss | - | - |
| - | 2 | |
| Statement of cash flows | (22) | (25) |
total comprehensive income
Apart from net income for the period, total comprehensive income comprises translation differences and related tax effects that subsequently may be reclassified to the income statement in a future reporting period, and, if any, fair value adjustments of equity investments and remeasurements of post-employment benefits (including tax effects), that will never be reclassified to the income statement.
related-party transactions
There are no material changes in the nature, scope, and (relative) scale in this reporting period compared to last year. More information is included in notes 28, 29 and 30 to the consolidated financial statements as at and for the year ended December 31, 2022.
commitments
There are no material changes in the nature and scope of commitments compared to December 31, 2022.
events after balance sheet date
Subsequentto the date ofthe balance sheet, no events materialto the Group as a whole occurred thatrequire disclosure in this note.