October 23, 2018 / 7:14 AM / a year ago

UPDATE 1-Staffing company Randstad's sales weakened by European slowdown

(Adds detail, outlook, CFO comments)

AMSTERDAM, Oct 23 (Reuters) - Randstad, the world’s second-largest staffing company, does not expect sales in its largest European markets to turn positive in the final months of the year after slipping in the third quarter, its finance chief said on Tuesday.

The Dutch company’s third-quarter sales came in at a little more than 6 billion euros ($6.9 billion), slightly below a forecast of 6.05 billion euros, reflecting weaker business in Germany and France. Similar weakness has also hit its largest rival Adecco.

Randstad’s sales in France and Germany fell 1 percent and 2 percent respectively in the quarter, compared with strong growth of 14 percent in France and 10 percent in Germany a year earlier.

“We do not assume a big turnaround in Europe,” CFO Henry Schirmer said, adding that the company does not expect a fourth-quarter return to growth in Germany and France. “We plan for the worst and hope for the best.”

Core earnings rose 4 percent to 299 million euros, in line with market forecasts. Analysts polled by Randstad had expected average earnings before interest, taxes and amortisation (EBITA) of 292 million euros.

Sales were hurt by a sharp slowdown in its main European markets, owing to weakness in business with the automotive industry and regulatory uncertainty in France and Germany, Schirmer said.

Randstad said in its outlook that “revenue growth in September and the trend of volumes in early October indicate a continuation of the Q3 growth rate”.

In North America, Randstad’s largest market and where it owns the Monster jobs website, sales picked up by 3 percent, reflecting strong economic growth. Costs for restructuring at Monster were roughly unchanged, Schirmer said.

Schirmer added that he would like to expand Randstad’s businesses in Japan and North America, possibly through small acquisitions.

“Japan is an interesting market,” he said. We would love to have a stronger position there. It’s not easy to get it and we are trying to grow organically as much as we can.” ($1 = 0.8721 euros)

Reporting by Anthony Deutsch Editing by David Goodman

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