Japan-based recruitment giant Recruit Holdings saw a decline in annual earnings from its flagship marketplace brands, Indeed and Glassdoor.
The group’s recruitment marketplaces businesses in domestic and foreign markets lag behind the previous year’s levels despite a quarterly bounce-back. Together with real estate vertical Suumo.jp, these marketplaces account for almost one-third the company’s total turnover, according to the AIM Group’s estimates.
The segment covers job marketplace Indeed.com and recruitment and employer-review site Glassdoor.com. Its revenue fell 0.4% to Y423.2 billion ($3.9 billion U.S.) for FY2020. On a U.S. dollar basis, revenue increased 2.2%. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was Y66.7 billion ($611.4 million U.S.), down 6.3%. The adjusted EBITDA margin was 15.8%.
In Q4, growth in small and medium enterprises and economic resilience in the U.S. and European countries boosted demand for sponsored job advertising though coronavirus uncertainty repelled the move by increasing employees’ retention.
“The imbalance during the quarter between muted job seeker activity and significant hiring demand increased competition for talent on Indeed and Glassdoor, and that competition was a significant driver of revenue growth in Q4,” Recruit said in earnings announcement.
Quarterly revenue increased 23.3% year-on-year to Y131.1 billion ($1.2 billion U.S.). On a U.S. dollar basis, revenue from the segment soared 26.8%. Adjusted EBITDA more than doubled to Y17.3 billion ($158.6 million U.S.) with cost-cutting measures keeping investment initiatives for product and technology unaffected. Adjusted EBITDA margin increased to 13.3% from 7.9% a year earlier.
Real estate, recruiting in Japan
Full-year revenue for housing and real estate – mainly coming from property vertical Suumo.jp – increased 3.2% to Y117 billion ($1.1 billion U.S.). It was Y33 billion ($300.6 million U.S.) in in Q4, up 7.2% as advertising demand for newly-built and existing homes and rental properties continued on the stability trajectory.
In FY2020, revenue from the group’s jobs websites — including Indeed Japan, Rikunabi Next and TownWork.net – sharply dropped 33% to Y187 billion ($1.7 billion U.S.), driven primarily by subdued part-time job ads from restrictively-operating restaurants in the state of emergency. Quarterly revenue also dipped 28.1% to Y50.3 billion ($461 million U.S.).
Overall, Recruit Holdings saw 27% annual net profit decrease to Y131.3 billion ($1.2 billion U.S.). Revenue slid 5.4% to Y2.3 trillion ($20.8 billion U.S.). Adjusted EBITDA was down 26% to Y242 billion ($2.2 billion U.S.). The financials were more or less in line with the guidance.
Recruit Holdings was founded in 1960 and operates 18 recruitment, auto, and real estate sites, as well as dozens of staffing companies worldwide.
The group has stake in recruitment businesses overseas, like China-based recruitment marketplace 51 Job. But, it didn’t specify earnings from abroad.
Recruit didn’t comment on the proposed privatization of China-based recruitment marketplace 51Job in which the group holds 34.8% stake.
Factoring in unexpectedness associated with the coronavirus pandemic, the company presented broad ranges for otherwise positive growth forecasts for the current fiscal year.