Japan – Recruit Holdings Q4 and full year revenue rise, growth driven by HR Technology

Japanese staffing firm Recruit Holdings (6098: JP) reported revenue today for the fourth quarter ended 31 March 2019. Revenue stood at JPY 580.3 billion (USD 5.2 billion). EBITDA grew by 24.2% to JPY 53.1 billion (USD 484.1 million) and the EBITDA margin was 9.2%.

Revenue growth during the fourth quarter was primarily driven by the HR Technology segment which saw an increase of 45.4% when compared to the same period last year.

(JPY billions)
Q4 2018
Q4 2017
Change
Q4 2018 (USD billions)
Revenue
580.3
556.4
4.3%
5.2
EBITDA
53.1
42.7
24.2%
0.4
EBITDA Margin
9.2%
7.7%
1.5
–

Revenue by segment was broken down as follows.

(JPY billions)
Q4 2018
Q4 2017
Change
Q4 2018 (USD billions)
HR Technology
90.0
61.9
45.4%
0.8
Media & Solutions
193.7
181.2
6.9%
1.7
Staffing
304.1
319.9
-4.9%
2.7

The company said its revenue increase in the HR Technology segment was mainly due to increased sponsored job advertising revenue from new and existing enterprise clients at Indeed and the contribution from Glassdoor, which was acquired during Q1 2018.

Within the Media & Solutions segment, the Housing and Real Estate and Beauty sub-segments saw growth. Revenue from Recruiting in Japan increased in Q4. The group said the extremely tight labour market continued in Japan, and the sub-segment focused on enhancing brand value, strengthening user attractiveness, and reinforcing its sales structure.

Within the Staffing segment, Japan operations revenue for Q4 increased as demand for agency workers continued to be strong, and placement revenue continued to increase as a result of revisions to Japanese laws, effective 1 October 2018, which encouraged enterprise clients to hire agency workers directly. However, overseas operations revenue for Q4 decreased mainly due to an uncertain outlook for the European economy, while it continued to focus on profitability improvement and simplifying the operational governance model in Europe.

The group also reported full year revenue as follows:

(JPY billions)
FY 2018
FY 2017
Change
FY 2018 (USD billions)
Revenue
2,310.7
2,173.3
6.3%
21.0
Gross profit
1,169.1
1,014.2
15.2%
10.6
Gross margin
50.6%
46.6%
N/A
N/A
Operating Income
223.0
191.7
16.3%
2.0
Profit attributable to owners of the parent
174.2
151.6
14.9%
1.5

Looking ahead, Recruit said revenue and adjusted EBITDA for all three of its segments is expected to increase.

In trading today Recruit Holdings shares closed at JPY 3,222.00 (USD 29.37), down 1.65% on the day and 16.20% below its 52-week high of JPY 3,845.00 (USD 35.05), set on 1 October 2018. Based on its current share price the company has a market value of JPY 5.56 trillion (USD 50.69 trillion).

Source:: http://www2.staffingindustry.com/row/Editorial/Daily-News/Japan-Recruit-Holdings-Q4-and-full-year-revenue-rise-growth-driven-by-HR-Technology-49933