1st quarter results 2024.

partner for talent.

interim financial statements

contents.

  1. Q1 2024: continued adaptability in a challenging market
  2. financial performance

4 core data

  1. invested capital
  2. cash flow summary
  3. performance

10 performance by geography

  1. performance by specialization
  2. other information

22 interim financial statements

2

interim financial statements

Q1 2024: continued adaptability in a challenging market

-7.8%

€ 177m

3.0%

Q1 2024 org. revenue growth1

Q1 2024 underlying EBITA1

Q1 2024 underlying EBITA margin1

Q1 2023 -4.2%

Q1 2023 € 266m

Q1 2023 4.1%

€ 5,938m

€ 126m

€ 88m

Q1 2024 Revenues

Q1 2024 operating profit

Q1 2024 net income

Q1 2023 € 6,518m

Q1 2023 € 218m

Q1 2023 € 154m

CEO Sander van 't Noordende commented, "We continued to adapt and respond well in Q1, as market conditions remained challenging. While we performed well in Southern Europe, LatAm and Asia Pacific, we encountered softer conditions than expected in North America and Northern Europe.

While we expect macroeconomic uncertainties to remain, we are executing our Partner for Talent Strategy, and investing where appropriate so that we are positioned for growth when the market returns.

1Alternative Performance Measures (APMs) which are considered as industry benchmarks. For the definition see "use of performance measures".

3

interim financial statements

financial performance.

core data

in millions of €, unless otherwise indicated

Q1

Q1

yoy

% M&A &

% fx.

% wd.

% org.1

2024

2023

change

other.

Revenue

5,938

6,518

(9)%

(1)%

1%

1%

(8)%

Gross profit, underlying2

1,199

1,368

(12)%

(1)%

1%

1%

(11)%

Operating expenses, underlying2

1,022

1,102

(7)%

(1)%

1%

n/a

(7)%

EBITA, underlying2

177

266

(33)%

0%

0%

n/a

(33)%

Integration costs and one-offs3

(41)

(37)

EBITA4

136

229

(41)%

Amortization and impairment of intangible

(10)

(11)

assets5

Operating profit

126

218

Net finance costs

(7)

(14)

Share of profit of associates

-

-

Income before taxes

119

204

(42)%

Taxes on income

(31)

(50)

Net income

88

154

(43)%

Adj. net income for holders of ordinary

123

191

(36)%

shares6

Free cash flow7

(42)

169

(125)%

Net debt8

437

145

201%

Leverage ratio (net debt/12-month EBITDA)

0.4

0.1

9

Days Sales Outstanding (DSO), moving

53.7

53.0

average10

Margins (in % of revenue)

Gross margin, underlying

20.2%

21.0%

Operating expenses margin, underlying

17.2%

16.9%

EBITA margin, underlying

3.0%

4.1%

Share data

Basic earnings per ordinary share (in €)

0.48

0.83

(42)%

Diluted earnings per ordinary share,

0.69

1.04

(34)%

underlying (in €)11

  1. For the definition of organic growth, see "use of performance measures".
  2. Adjusted for integration costs and one-offs. For the definition see "use of performance measures".
  3. Integration costs and one-offs include adjustments made for restructuring, integration expenses and M&A expenses for acquired group companies.
  4. Operating profit before amortization and impairment of acquisition-related intangibles and goodwill. For the definition see "use of performance measures".
  5. Amortization and impairment of acquisition-related intangible assets and goodwill.
  6. Net income before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-offs. For the reconciliation see table 'Earnings per share'. For the definition see "use of performance measures".
  7. Free cash flow is the sum of net cash flow from operating activities and investing activities excluding cash flows for acquisitions and disposals of subsidiaries, equity investments and (dividends of) associates, and repayment of lease liabilitites. For the definition see "use of performance measures".
  8. Cash and cash equivalents minus current borrowings and non-current borrowings.
  9. Leverage ratio excluding the effects of IFRS 16. For the definition see "use of performance measures".

10The DSO is calculated at the end of each month by dividing Trade receivables at the end of the month by the last 3 months of revenue (including VAT) and multiplied by 365 days divided by 4 (quarters). The moving average DSO is the sum of the last twelve months of DSO divided by 12 (months).

11 The diluted earnings per ordinary share, underlying is before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-offs. See table 'Earnings per share'. For the definition see "use of performance measures".

4

interim financial statements

financial performance.

revenue

Reported revenue was down 8.9% YoY, of which working days had a positive impact of 1.1% while FX had a positive effect of 0.8%. M&A & other negatively contributed 0.8%. This results in an organic revenue per working day being down 7.8% YoY in Q1 2024, bringing Q1 revenue to € 5,938 million (Q4 2023: down 8,6%).

In North America, revenue per working day was down 15% (Q4 2023: down 16%). In Northern Europe, revenue per working

day was down 8% (Q4 2023: down 9%). Revenue in the Netherlands was down 7% (Q4 2023: down 8%), while Germany

was down 15% (Q4 2023: down 18%). Revenue in Belgium and Luxembourg was down 4% (Q4 2023: down 7%). In other

Northern European countries, revenue was down 9% (Q4 2023: down 3%). In Southern Europe, UK and Latin America,

revenue was down 3% (Q4 2023: down 4%). Revenue in France was down 5% (Q4 2023: down 5%) and in Italy revenue

was down 2% (Q4 2023: down 2%). Revenue in Iberia was up 4% YoY (Q4 2023: flat). Across other Southern European

countries, UK & Latin America, revenue per working day was down 8% YoY (Q4 2023: down 10%). In the Asia Pacific

region, revenue was down 7% (Q4 2023: down 4%).

Operational talent solutions was down 7% YoY organically, whereas Professional talent solutions was down 6%. Digital talent solutions was down 12%, while Enterprise talent solutions was down 10% on an organic basis.

Perm fees decreased by 21% YoY (Q4 2023: down 26%). Total revenues of permanent placements, amounted to

  • 131 million in Q1 2024 (Q1 2023: € 170 million). RPO fees decreased by 20% YoY (Q4 2023: down 31%). Revenue of recruitment process outsourcing that we report in Enterprise talent solutions amounted to € 79 million in Q1 2024 (Q1 2023: € 99 million). Perm and RPO fees made up 16% of gross profit.

gross profit

In Q1 2024, reported gross profit amounted to € 1,197 million (Q1 2023: €1,368 million) down 12% YoY. Gross profit was

adjusted for € 2 million of one-offs (Q1 2023: nil), resulting in an underlying gross profit of € 1,199 million (Q1:

  • 1,368 million), down 11% YoY organically. Currency effects had a positive € 20 million impact on gross profit compared to Q1 2023.

year-on-year underlying gross margin development (%)

22%

21%

20%

19%

18%

21.0%

-0.1%

-0.3%

-0.4%

20.2%

Q1 2023

Temp

Perm placements

HRS/other

Q1 2024

Underlying gross margin was 20.2% in the quarter compared to 21.0% in Q1 2023 (as shown in the graph above). Temporary placements had a 10bp negative impact on underlying gross margin (Q4 2023: 50bp positive impact). Permanent placements had a 30bp negative impact (Q4 2023: 40bp negative impact), while HRS/other had a 40bp negative impact (Q4 2023: 20bp negative impact).

5

interim financial statements

financial performance.

sequential underlying OPEX development in € M

1,100

1,000

11

-7

2

1,022

1,016

900

Q4 2023

FX

Organic

M&A/Other

Q1 2024

operating expenses

Operating expenses were € 1,061 million (Q1 2023: € 1,139 million) down 7% YoY and were adjusted for € 39 million of

integration costs and one-offs (Q1 2023: € 37 million), resulting in underlying operating expenses of € 1,022 million (Q1

2023: € 1,102 million), an organic decrease of € 7 million sequentially. The integration costs and one-offs of € 39 million mainly reflects restructurings in a few countries and integration costs for our recent acquisitions. Currency effects had a

  • 15 million positive impact. Compared to last year, underlying operating expenses were down 7% YoY organically (Q4 2023: down 4%).

Personnel expenses were down 1% sequentially. Average headcount (in FTE) amounted to 42,280 for the quarter, organically down 8% YoY and broadly in line sequentially. We operated a network of 4,726 outlets, including branches and inhouse locations end of period (Q4 2023: 4,879).

EBITA

EBITA was € 136 million (Q1 2023: € 229 million). EBITA was adjusted for € 41 million of integration costs and one-offs (Q1

2023: € 37 million), resulting in an underlying EBITA of € 177 million (Q1 2023: € 266 million) which means an organic decline of 33%. Currency effects had a € 6 million negative impact YoY. EBITA margin reached 3.0% in the quarter, 110bp below Q1 2023. Overall, we achieved a recovery ratio of 47% in Q1 2024 .

operating profit

Operating profit was € 126 million (Q1 2023: € 218 million). Compared to last year, operating profit was down € 92 million YoY.

net finance costs

In Q1 2024, net finance costs were € 7 million, compared to € 14 million in Q1 2023. Interest expenses on our net debt position were € 8 million (Q1 2023: € 6 million), and interest expenses related to lease liabilities were € 6 million (Q1 2023

  • 6 million). Foreign currency and other effects had a positive impact of € 7 million (Q1 2023: negative impact of
  • 2 million).

tax rate

The effective tax rate amounted to 26% (Q1 2023: 24.5%). For FY 2024, we expect an effective tax rate between 25% and 27%.

6

interim financial statements

financial performance.

net income, earnings per share

In Q1 2024, net income was down to € 88 million or down by 43% YoY. Adjusted net income was down 36% YoY to

  • 123 million. Diluted underlying EPS amounted to € 0.69 (Q1 2023: € 1.04). The average number of diluted ordinary shares outstanding for the quarter was 178.7 million (Q1 2023: 183.6 million).

7

interim financial statements

financial performance.

invested capital

in millions of €, unless otherwise indicated

mar 31

dec 31

sep 30

jun 30

mar 31

dec 31

2024

2023

2023

2023

2023

2022

Goodwill and acquisition-related intangible assets

3,216

3,225

3,246

3,224

3,251

3,280

Operating working capital (OWC)1

1,252

1,105

1,204

1,294

1,257

1,239

Net tax assets2

766

741

662

649

623

619

All other assets/(liabilities)3

(99)

552

600

608

109

647

Employed capital

5,135

5,623

5,712

5,775

5,240

5,785

Financed by

Total equity

4,090

4,700

4,705

4,567

4,495

4,915

Net debt

437

306

419

616

145

272

Lease liabilities

608

617

588

592

600

598

Invested capital

5,135

5,623

5,712

5,775

5,240

5,785

Revenues (last twelve months)

24,846

25,426

26,250

27,044

27,465

27,568

Underlying EBITA (last twelve months)

986

1,075

1,174

1,237

1,274

1,294

Income tax paid (last twelve months)

(259)

(256)

(245)

(222)

(243)

(261)

Ratios

Days Sales Outstanding (DSO), moving average

53.7

53.3

53.4

53.3

53.0

52.9

OWC as % of revenue over last 12 months

5.0%

4.3%

4.6%

4.8%

4.6%

4.5%

Return on invested capital4

14.2%

14.6%

16.3%

17.6%

19.7%

17.9%

  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. For the definition see "use of performance measures".
  2. Net tax assets: Deferred income tax assets and income tax receivables less deferred income tax liabilities and income tax liabilities. For the definition see "use of performance measures".
  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 2024, € 635 million dividends payable is included (March 31, 2023 € 530 million). For breakdown, refer to "use of performance measures".
  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 14.2%, a decrease of 550bp YoY. This is mainly a reflection of the year- over-year deterioration in our 12-month rolling EBITA, which was partially offset by the impact of the dividend announcement.

The moving average of Days Sales Outstanding (DSO) was 53.7 (Q4 2023: 53.3).

At the end of Q1 2024, net debt (including IFRS 16 'leases') was € 1,045 million, compared to € 745 million at the end of Q1 2023. A further analysis of the cash flow is provided in the next section.

8

interim financial statements

financial performance.

cash flow summary

in millions of €

Q1 2024

Q1 2023

change

EBITA

136

229

(41)%

Depreciation, amortization and impairment of property, plant, equipment, right-of-use

83

72

assets, and software

EBITDA

219

301

(27)%

Operating working capital

(144)

(27)

Provisions and employee benefit obligations

(7)

8

All other items

17

23

Income taxes

(54)

(51)

Net cash flow from operating activities

31

254

(88)%

Net capital expenditures

(17)

(22)

Financial assets

-

(11)

Repayments of lease liabilities

(56)

(52)

Free cash flow1

(42)

169

(125)%

Net (acquisitions)/disposals2

-

(1)

Net purchase of own ordinary shares

(77)

(36)

Net finance costs paid

(7)

(5)

Translation and other effects

4

(2)

Net (increase) / decrease of net debt3

(122)

125

  1. Free cash flow is the sum of net cash flow from operating activities and investing activities excluding cash flows for acquisitions and disposals of subsidiaries, equity investments and (dividends of) associates, and repayment of lease liabilitites.
  2. Net (acquisitions)/ disposals represents the net cashflows from the acquisitions and disposals of subsidiaries, associates and equity investments. For details see the consolidated statements of cash flows.
  3. The movement in net debt between two reporting periods. For the definition see "use of performance measures".

In the quarter, free cash flow amounted to € -42 million, down € 211 million YoY (Q1 2023: € 169 million). Free cash flow trend mainly reflects the movement of working capital year over year, in combination with the decline in EBITA.

9

interim financial statements

performance.

performance by geography

Q1 2024: revenue € 5,938 million

Q1 2024: underlying EBITA € 177 million

10%

10%

13%

20%

38%

29%

32%

48%

North America

Northern Europe

Southern Europe,

Asia Pacific

UK & Latin America

revenue in millions of €

Q1 2024

Q1 20231

∆ %

% M&A &

% fx.

% wd.

organic ∆%2

other.

North America

1,199

1,421

(16)%

0%

1%

0%

(15)%

Netherlands

751

817

(8)%

0%

0%

1%

(7)%

Germany

423

509

(17)%

0%

0%

2%

(15)%

Belgium/Luxembourg

372

394

(5)%

0%

0%

1%

(4)%

Other NE Countries

345

380

(9)%

0%

(2)%

2%

(9)%

Northern Europe

1,891

2,100

(10)%

0%

0%

2%

(8)%

France

896

952

(6)%

0%

0%

1%

(5)%

Italy

529

538

(2)%

0%

0%

0%

(2)%

Iberia

431

373

16%

(14)%

0%

2%

4%

Other SE Countries, UK & Latam

412

457

(10)%

0%

0%

2%

(8)%

Southern Europe, UK & Latin America

2,268

2,320

(2)%

(2)%

0%

1%

(3)%

Asia Pacific

580

677

(14)%

0%

6%

1%

(7)%

Revenue

5,938

6,518

(9)%

(1)%

1%

1%

(8)%

  1. 2023 has been restated due to changes in the external reporting structure. Refer to the notes to the consolidated interim financial statements for further detail.
  2. Organic change is measured excluding the impact of currencies, hyperinflation, acquisitions, disposals, and reclassifications. For revenue, the organic change has been adjusted for the number of working days.

10

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Randstad Holding NV published this content on 23 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 April 2024 04:59:03 UTC.