Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Robert Walters PLC (STU:RBW, Financial) has made good early progress on its strategic plan despite challenging global hiring conditions in 2024.
- The company has secured over GBP 4 million in structural cost savings, positioning it well for 2025.
- There is strong potential for growth in Japan, particularly in the interim management, workforce consultancy, and talent advisory sectors.
- The rollout of the Zenith CRM system is expected to enhance fee earner productivity and efficiency.
- The company is pursuing service line diversification with a focus on high-margin areas like interim management and workforce consultancy.
Negative Points
- Global hiring markets remained challenging in 2024, leading to a 14% reduction in group net fee income.
- Specialist recruitment fees were down 13%, with permanent fees declining by 14%.
- Recruitment outsourcing fees decreased by 18%, reflecting client caution in the financial services sector.
- Operating profit was significantly impacted, resulting in a break-even position at the profit before tax level.
- The company anticipates that an improvement in end markets is unlikely before the latter part of 2025.
Q & A Highlights
Q: Could you provide more color on the outperformance of the interim business in Belgium and the Netherlands, and your outlook for this segment in 2025? Also, do you see the business pivoting towards an increased Asia Pacific focus?
A: The interim business performed well, particularly in Belgium and Germany, with stable performance in the Netherlands. This is driven by a high demand for skilled professionals on interim contracts. We expect strong conversion rates to continue. Regarding Asia Pacific, while it currently represents 43% of fees, we see significant growth potential, especially in Japan and Southeast Asia. However, Europe remains important, and we anticipate a balanced portfolio approach.
Q: In challenging markets like France, how do you pivot from one sector to another where there might be more growth? Is there an appetite among consultants to shift disciplines?
A: We analyze P&Ls and have merged several in France, redeploying talent to growth markets. Consultants have recruitment skills that can be adapted to new sectors, although it takes time to upskill. We also leverage international relocations to dynamic markets like Japan.
Q: Is AI creating extra work for you, given the influx of AI-generated applications?
A: AI is indeed creating more work for our clients due to the volume of applications. Our role is to provide a three-dimensional view of candidates, offering insights beyond AI-generated data. This is similar to the challenges faced with the advent of job boards.
Q: What are your thoughts on the current job market logjam and candidate confidence? Are there specific sectors showing strong job flow?
A: The situation varies by market. In Asia Pacific, there's optimism in Australia, while New Zealand faces challenges. Malaysia is performing well as an offshoring center. Sectors like supply chain, procurement, legal, and finance transformation are holding up well, while tech remains slow.
Q: How are you managing costs and what are your expectations for cash flow in 2025?
A: We exited 2024 with a reduced monthly cost base and will continue to manage costs selectively. We expect typical cash flow patterns, with a lower net cash position in the first half due to dividend payments and bonuses, but anticipate a more balanced working capital impact compared to last year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
