Thursday, February 22, 2024

Adecco Group revenue rises 5% in Q4; revenue up across global business units

Must read

February 28, 2023

The Adecco Group reported revenue rose 5% in the fourth quarter on an organic basis with adjustment for the number of trading days. The Zurich, Switzerland-based staffing giant noted revenue rose across all three global business units — Adecco, LHH and Akkodis.

The Adecco Group also reported perm placement revenue was up 3% on an organic basis, while flexible placement revenue grew 1%. Career transition revenue rose 15%.

“We achieved excellent growth in Q4, with Adecco significantly outpacing the market,” CEO Denis Machuel said.

“The newly combined Akkodis business performed well, overdelivering on its synergy target for 2022 and tracking on target for synergy capture for 2023. In LHH, our digital coaching business, Ezra, posted strong growth, and our career transition business delivered excellent results as the team successfully captures increasing demand amidst an uptick in corporate restructuring driven by the US technology sector.”

Machuel noted gross margins were strong for the quarter.

“Our simplify, execute, grow agenda is being progressed across the organization to accelerate the implementation of our existing strategy and improve both operational and financial performance. We are very confident we will achieve the planned cost reduction target.”

In Adecco’s LHH business unit, revenue rose 1% on an organic and trading-day adjusted basis. However, the company noted recruitment solutions revenue fell 7%, reflecting a tough comparison and market deceleration in the US.

The “career transition and mobility” segment of LHH was up 19%, driven by major project wins in the US, focused on the tech sector. However, gross profit for the segment was 7% lower, with permanent placement fees 2% lower.

In the group’s Akkodis business unit, revenue rose 6% on an organic basis.

At Adecco, the company’s largest business unit, revenue increased 6% in the fourth quarter, boosted by strength in France and strong results from DACH (Germany, Austria and Switzelrand) and Asia Pacific.

In North America, Adecco revenue fell 13%, reflecting compressed peak season demand. However, the company noted relative performance trended positively. Operational green shoots were also strengthened, with improved sales intensity and fill rates and lowered voluntary turnover.

In Latin America, the company reported revenue rose 21%, led by Argentina and Mexico.

Guidance

The Adecco Group noted the market for talent services remains dynamic, with a December exit rate of 6%. In the first quarter, the Group expects gross margin and selling, general and administrative expenses (excluding one-offs) to be in line with the fourth quarter’s reported levels.

Share price and market cap

Shares in The Adecco Group closed down 2.90% to 33.46 Swiss francs (US$35.63) today in Switzerland; they were 26.84% above their 52-week low, according to FT.com. The company had a market cap of 5.81 billion Swiss francs (US$6.19 billion).

Latest article