Randstad, the world's second-largest staffing agency, is looking for acquisitions and hopes to insulate itself from economic downturns by expanding services for companies that need to lay off staff. The market for so-called outplacement services to help businesses meet their obligations to laid-off staff in redundancy programmes is worth about 4 billion euros, Randstad estimates, and is dominated in the United States by Adecco and Manpower.
Randstad's CFO told Reuters on Tuesday that the Dutch company sees expansion of its outplacement business as one way to boost profit margins to match Switzerland's Adecco, along with strategic acquisitions in professional staffing sectors. "They (Adecco) have the benefit of an extensive outplacement business, which we do not yet have. So that has some impact, but nevertheless we should aim at getting there," Robert Jan van de Kraats said after reporting Randstad's 10th straight quarter of sales growth. Adecco achieved outplacement revenue of 344 million euros ($389 million) last year and has established a particularly strong presence in the United States.
Randstad does not release figures for its outplacement business, but Van de Kraats said it has a significant presence only in the Benelux countries. In September it spent $100 million to buy US business RiseSmart, which uses a digital platform to help departing employees to find new jobs. Van de Kraats said that Randstad would be willing to spend up to 500 million euros more on acquisitions, with outplacement or professional services such as IT staffing its preferred targets.
The company earlier reported first-quarter earnings before interest, tax and amortisation (EBITA) up 10 percent to 168.9 million euros, slightly better than the consensus forecast from analysts polled by Reuters. Shares in Randstad fell by 1.9 percent, though they have outperformed Adecco by 20 percent over the past five years, helped by the company's more consistent revenue growth. Randstad reported revenue before acquisitions up 5 percent to 4.7 billion euros, with European sales rising 6 percent on strength in France and Germany.
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