RANJF - Randstad N.V. (RANJF) Q1 2024 Earnings Call Transcript

2024-04-23 14:06:15 ET

Randstad N.V. (RANJF)

Q1 2024 Earnings Conference Call

April 23, 2024 3:00 AM ET

Company Participants

Sander van't Noordende – Chief Executive Officer

Jorge Vazquez – Chief Financial Officer

Conference Call Participants

Simona Sarli – Bank of America

Suhasini Varanasi – Goldman Sachs

Abi Bell – UBS

Afonso Osorio – Barclays

Marc Zwartsenburg – ING

Konrad Zomer – ABN AMRO

Sylvia Barker – JPMorgan

RemiGrenu – Morgan Stanley

Presentation

Operator

Good day, and welcome to Randstad's First Quarter Results 2024 Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. Later we will conduct a Q&A. [Operator Instructions]

At this time, I'd like to hand the call over to Mr. Sander van't Noordende, CEO. Please go ahead, sir.

Sander van't Noordende

Thank you, Alicia, for the introduction, and good morning everybody. I'm here with Jorge, Steph, and Temur from Investor Relations. During the first quarter, we continued to adapt, as market conditions remain challenging. While we performed well in Southern Europe, LatAm and Asia Pacific, we encountered softer than expected conditions in North America and in Northern Europe. Against this backdrop, we delivered revenues of €5.9 billion, a decline of 7.8% year-on-year. Our gross margin came in at 20.2%, modestly down compared to last year, reflecting our service mix and a slightly lower margin in our staffing business, which was driven by higher sickness and other seasonal effects.

As you would expect, we sustained our focus on adaptability resulting in an underlying EBITA of €177 million, a 3% margin for the quarter with a recovery rate of 46%. And as we move into Q2, we expect the macroeconomic environment to remain challenging. That said we do see green shoots across some of our regions and segments. And in our conversation with clients, we hear that things appear to be bottoming out. We're now a few weeks into April, and we are seeing broadly similar volumes to those at the end of Q1. We are ramping up our commercial activities and following our steering principles with investments in field capacity where we see concrete growth opportunities. Also in Q1, we stayed the course on executing our partner for talent strategy. And as you might recall, a key priority for us is growth through specialization. We have identified four specializations: operational, professional, digital and enterprise and each of these specialization is focused on high-growth markets. Another pivotal plank of the strategy is our investment in technology and I would like to highlight three things in particular.

Firstly, the implementation of our specialization framework is progressing at speed. At the time of our Q4 results in February, we have implemented the framework in half of our markets. We now expect 90% of our markets to be brought within the new framework this quarter. Secondly, we are excited that our digital marketplace rollout in North America is progressing very well. As set out at our Capital Markets Day, we expected to reach a run rate of €2 billion globally by the end of 2024. We now expect to reach this number in Q2, several months ahead of schedule. Thirdly, our Randstad Talent platform went live in the Netherlands and Sweden, and the rollout has gone smoothly and according to plan. In summary, the ramp-up of commercial activities, our investments in field capacity where we see fit, combined with the execution of our partner for talent strategy, positioned us very well to capitalize on the growth opportunities when the markets return. And it's fantastic to see the focus and commitment of our people across the globe and how they position Randstad for growth....

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