UPDATE: Randstad Focuses On Specialties As Markets Recover

Dutch staffing firm Randstad Holding NV (RAND.AE) said Friday it will focus on staffing specialties and professionals as it tries to extract more value from its business.

Reporting a return to growth in some markets, the company said margins remain under pressure but the decline in revenues has continued to slow.

Randstad said that the U.S. market has returned to growth for the first time in three years, while in Europe Poland, Portugal, Denmark and Sweden were also growing. Its large German and U.K. markets are improving, it said, while the revenue decline in its Dutch market is stabilizing. Elsewhere, China and Brazil have also returned to growth.

Still, Randstad said margins remain under pressure as it lowers prices when renewing client contracts in order to keep or increase market share.

Randstad is one of the world's largest staffing companies by sales. Its main competitors are Switzerland's Adecco SA (ADEN.VX) and Manpower Inc. (MAN) of the U.S.

The news boosted the company's shares and at 0825 GMT, the stock was trading up 4.7% at EUR31.90, the biggest rise on a lower AEX market. The stock has risen sharply in 2009 on hopes the worst is over for the staffing markets.

The world's staffing companies have been hit hard by the economic downturn as companies have laid off permanent and temporary staff and restricted new recruitment. The staffing companies themselves have laid off staff and cut costs to try and counter a sharp decline in revenues and profits. However, Adecco SA, the world's biggest staffing company by sales, last month said it was seeing a pickup in demand for blue-collar workers in the U.S. and France, raising hopes that markets could begin a slow recovery.

Echoing moves by Adecco, Randstad said it will focus on organic growth in the white-collar segment. Big staffing companies are pushing to expand in the professionals and specialties segment, where they can make more money per placement than placing blue-collar staff. Underpinning this trend, Adecco last month bought U.S.-based MPS Group Inc, a specialist in placing professional workers.

The segment includes professionals like doctors and lawyers and specialists like IT workers and engineers.

Randstad is giving a strategy update to investors Friday. It said it wouldn't give any new financial targets.

In the third quarter the company reported a 22% fall in net profit as revenues dropped 29% to EUR3.1 billion.

Separately Netherlands-based peer USG People NV (USG.AE) said it will appoint Herman van Campenhout as its new chief executive, with effect from March next year.

Herman van Campenhout is currently at the helm of the Science and Technology division of Reed Elsevier (RNL), an Anglo-Dutch publishing group. Last summer, USG People's chief executive Ron Icke stepped down with immediate effect, citing differences in opinion about the company's strategy.

-By Maarten van Tartwijk; Dow Jones Newswires; +31-20-5715-200; maarten.vantartwijk@dowjones.com

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