• Q4 Organic Revenue Decline: 5.5% decrease.
• Q4 Gross Margin: 18.8%.
• Q4 EBITDA: EUR 200 million.
• Q4 EBITDA Margin: 3.3%.
• Full Year 2024 Revenue: EUR 24.1 billion, 7% lower year over year.
• Full Year 2024 EBITDA: EUR 754 million.
• Full Year 2024 EBITDA Margin: 3.1%.
• Proposed Dividend: EUR 1.62 per share, totaling EUR 285 million.
• North America Revenue Decline: 7% sequentially.
• Northern Europe Revenue Decline: 7%.
• Southern Europe Revenue Growth: Spain grew 9%.
• Asia Pacific EBITDA Margin: 4.3%.
• Q4 Gross Margin Decline: 130 basis points year over year.
• Q4 Integration and One-off Expenses: EUR 79 million.
• Q4 Free Cash Flow: EUR 87 million.
• Full Year 2024 Leverage: 1.6 times.
• Effective Tax Rate: 35%, underlying rate 23.4%.

• Warning! GuruFocus has detected 2 Warning Sign with BOM:500463.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Randstad NV (RANJY) achieved a gross margin of 18.8% in Q4, driven by a strategic business and service mix.
• The company delivered an EBITDA of EUR 200 million for Q4, with a margin of 3.3%, showcasing effective cost management.
• Randstad NV (RANJY) proposed a dividend of EUR 1.62 per share, reflecting confidence in its business and capital allocation policy.
• The implementation of the specialization framework across all markets is a key milestone, enhancing client understanding and competitive dynamics.
• The launch of over 45 specialized talent and delivery centers in 10 key markets resulted in a 20% increase in fulfillment in 2024.

Negative Points

• Randstad NV (RANJY) experienced a 5.5% decline in organic revenue in Q4 due to labor market challenges.
• The company's full-year 2024 revenues were EUR 24.1 billion, 7% lower year over year.
• The automotive sector continues to be under pressure, impacting growth in key regions like Germany and France.
• The EBITDA margin in Northern Europe was affected by restructuring efforts and challenging macroeconomic conditions.
• Randstad NV (RANJY) incurred EUR 79 million in integration and one-off expenses in Q4, impacting financial performance.

Q & A Highlights

Q: Can you provide an update on the competitive environment and pricing, and how these factors are impacting the gross margin? A: Jorge Vazquez, CFO: The competitive environment remains rational, and pricing is not a significant factor in the gross margin development. The impact on gross margin is primarily due to mix changes and some incidentals. We expect some reversal of these impacts in Q1, leading to a slight improvement in gross margins sequentially.

Q: What should we expect regarding one-off costs in 2025, given the elevated levels in Q4? A: Jorge Vazquez, CFO: The one-off costs in Q4 were due to necessary restructuring to make Randstad leaner and more efficient. We expect these costs to normalize in 2025, as we have already taken significant actions to adjust to current market conditions.

Q: Are you seeing real stabilization in market volumes, or is it more based on client discussions and forward visibility? A: Sander Van 't Noordende, CEO: The stabilization we are seeing is backed by real numbers. The labor market is currently "stuck," with low hiring levels and few layoffs. While there is optimism in the US, it has not yet translated into a material uptick. Overall, we see stabilization with some positive indicators.

Q: How do you expect the gross margin to evolve in Q1, considering the impact of Zorgwerk and restructuring benefits? A: Jorge Vazquez, CFO: Zorgwerk is expected to add 10 to 15 basis points to the gross margin. Additionally, restructuring benefits should contribute another 10 basis points. We anticipate a modest sequential improvement in gross margin in Q1.

Q: Can you quantify the impact of idle time and sickness on the gross margin, and is there a structural shift towards lower-cost channels like digital? A: Jorge Vazquez, CFO: The impact of idle time and sickness is volatile and difficult to quantify precisely. There is no structural shift towards lower-cost channels; our digital marketplace is integrated into our business and offers a better experience without necessitating lower pricing.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.