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Adecco Q2 revenue up 5% organically; North America general staffing back to growth

August 09, 2018

The Adecco Group, the world’s largest staffing provider, reported second-quarter revenue rose 5% on an organic basis, which excludes the impact of currency as well as acquisitions and divestitures. Gross margin was flat year over year. However, the company noted that North American general staffing revenue returned to growth with a 4% year-over-year increase in revenue on an organic basis — its best growth since 2015. It had fallen 1% year over year in the first quarter.

Separately, the Zurich-based company reported second-quarter permanent placement revenue in its global operations rose 18% on an organic basis.

(€millions) Q2 2018 Q2 2017 % change % change on an organic basis Q2 2018 (USD$millions)
Revenue € 6,052 € 5,972 1% 5% $7,049
Gross profit € 1,107 € 1,091 2% 5% $1,289
Gross margin 18.3% 18.3% - - -
Net income attributable to Adecco Group shareholders € 170 € 192 -11% - $198

Business Process Outsourcing revenue, which includes MSP and RPO business lines, rose 5% on an organic basis in the second quarter. Revenue in the company’s Career Transition & Talent Development segment, which includes outplacement provider Lee Hecht Harrison and recently acquired training provider General Assembly, rose 4% on an organic basis.

Adecco also struck a deal in July to sell its stake in VMS provider Beeline. It noted €172 million (US$200.3 million) in after-tax cash proceeds.

Adecco noted €2 million (US$2.3 million) in restructuring costs in its general staffing business in North America, UK and Ireland during the second quarter. It also noted €4 million (US$4.7 million) in restructuring costs in its professional staffing business in North America, UK and Ireland.

Quote

“In Q2 2018, underlying revenue growth was solid, at 4%, and the mix of growth became more balanced,” CEO Alain Dehaze said. “North America General Staffing returned to growth, achieving its strongest performance since Q2 2015, mostly offsetting lower growth in certain European countries. And in France, our largest business, we significantly outperformed the market.”

Revenue by geography

(€millions) Q2 2018 Q2 2017 % change % change on an organic basis Q2 2018 (USD$millions)
France € 1,472 € 1,368 8% 8% $1,715
North America, UK & Ireland General Staffing € 711 € 734 -3% 4% $828
North America, UK & Ireland Professional Staffing € 860 € 934 -8% -1% $1,002
Germany, Austria, Switzerland € 553 € 531 4% 6% $644
Benelux and Nordics € 530 € 512 4% 5% $617
Italy € 521 € 468 11% 11% $607
Japan € 324 € 334 -3% 3% $377
Iberia € 287 € 269 6% 6% $334
Rest of World € 685 € 710 -3% 5% $798
Career Transition and Talent Development € 109 € 112 -2% -4% $127

While North America general staffing returned to growth, professional staffing revenue in North America was flat, according to the company. Growth in engineering & technical, finance & legal, and medical & science was offset by a decline in IT.

Revenue by business line

(€millions) Q2 2018 Q2 2017 % change % change constant currency Q2 2018 (USD$millions)
Office € 1,375 € 1,393 -1% 4% $1,602
Industrial € 3,249 € 3,108 5% 7% $3,784
Information Technology € 633 € 655 -3% 2% $737
Engineering & Technical € 253 € 280 -10% -4% $295
Finance & Legal € 251 € 249 0% 7% $292
Medical & Science € 135 € 127 6% 13% $157
Career Transition & Talent Development € 109 € 112 -2% 4% $127
Business Process Outsourcing € 47 € 48 -2% 5% $55

For Adecco’s full report, click here.

Share price and market cap

Shares in Adecco closed down 2.01% today in Switzerland to 59.48 Swiss francs. It has a market cap of 9.86 billion Swiss francs.

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