HALF YEAR REPORT 2022

INTRODUCTION AND CONTENTS

Market share

momentum, solid growth

and margin

For�more�information�go�to

adeccogroup�com

In this report

Operating�and�financial�review

Consolidated�statements�of�cash�flows

Selected�financial�information

��

Consolidated�statements�of�changes�in�

Consolidated�balance�sheets

��

shareholders'�equity

Consolidated�statements�of�operations

��

Notes�to�consolidated�financial�statements

Consolidated�statements�of�

Non-US�GAAP�information�and�

comprehensive�income

��

financial�measures

��

��

��

��

1

2022 Half Year Report

O P E R A T I N G A N D F I N A N C I A L R E V I E W

in millions, except share and per share information

Overview

During�the�first�half�of�������the�Company�focused�on�gaining�market� share��The�investment�in�headcount��particularly�in�Adecco�delivered� significant�results��with�notable�improvement�in�relative�revenue�growth� in�several�regions��Revenues�increased�by ���both�organically�and� trading�days�adjusted��led�by�the�Akkodis�GBU��LHH�Recruitment� Solutions�and�Adecco�APAC�and�Southern�Europe�&�EEMENA��

Gross�margin�was�����bps�above�the�first�half�of������on�a�reported� basis��Organically�the�gross�margin�increased�by����bps��reflecting�the� portfolio's�shift�into�higher�value�activities�and�positive�pricing�dynamics.

Selling��general��and�administrative�expenses��SG&A��excluding�one-offs� increased�����organically��As�a�percentage�of�revenues��SG&A� excluding�one-offs�was��������compared�to�������a�year�ago��driven� primarily�by�investments�in�sales�capacity��FTE employees�increased�

����organically�year-on-year��

in�EUR�

The�EBITA�margin�excluding�one-offs�was�������a�decrease�of����bps�year-on-year�on�a�reported basis�due�to�growth�investments��a� moderated�contribution�from�LHH�and�less�non-recurring�benefits�when� compared�to�the�prior�period��

Free�cash�flow�in�the�first�half�of������was�EUR��������This�compares�to� EUR�����in�the�first�six�months of�last�year��and�was�impacted�by� increased�working�capital�needs�to�support�revenue�growth��The� Company�distributed�EUR�����in�dividends�and�completed�the� acquisition�of�AKKA�Technologies��Net�debt�at����June������was�EUR�

�������representing�a�ratio�of����x�net�debt�to�EBITDA�excluding�one- offs�and�on�a�pro-forma�basis�

Variance

HY�����

HY�����

Reported

Organic

Summary�of�income�statement�information

Revenues

������

������

����

���

Gross�profit

�����

�����

����

���

EBITA�excluding�one-offs

���

�����

-���

-���

EBITA

���

�����

-���

-���

Net�income�attributable�to�Adecco�Group�shareholders

���

���

-���

Diluted�EPS

����

����

-����

Adjusted�EPS

����

����

-����

Gross�margin

�����

�����

����bps

���bps

EBITA�margin�excluding�one-offs

����

����

-���bps

-����bps

EBITA�margin

����

����

-����bps

-����bps

Summary�of�cash�flow�and�net�debt�information

Free�cash�flow�before�interest�and�tax�paid��FCFBIT�

���

Free�cash�flow��FCF�

�����

���

Net�debt

�����

���

Days�sales�outstanding

��

��

Cash�conversion

���

���

Net�debt�to�EBITDA�excluding�one-offs

���x

���x

Organic�growth�is�a�non-US�GAAP�measure�and�excludes�the�impact�of�currency��acquisitions�and�divestitures�

In�the�first�six�months�of�������SG&A�included�one-offs�of�EUR����in�restructuring�and�acquisition�related�costs�

EBITA�is�a�non-US�GAAP�measure�and�refers�to�operating�income�before�amortisation�and�impairment�of�goodwill�and�intangible�assets�

Free�cash�flow�is�a�non-US�GAAP�measure�and�comprises�cash�flows�from�operating�activities�less�capital�expenditures�

Net�debt�is�a�non-US�GAAP�measure�and�comprises�short-term�and�long-term�debt�less�cash�and�cash�equivalents�and�short-term�investments�

  • Net�debt�to�EBITDA�is�a�non-US�GAAP�measure�and�is�calculated�as�net�debt�at�period�end�divided�by�the�last�four�quarters�of�EBITA�excluding�one-offs�plus�depreciation��
  • Adjusted�EPS�is�a�non-US�GAAP�measure�and�refers�to�Net�income�attributable�to�Adecco�Group�shareholders�before�amortisation�and�impairment�of�goodwill�and�intangible�assets��excluding�one-off�costs�and�exceptional�tax�items��divided�by�basic�weighted-average�shares�outstanding�
  • Cash�conversion�is�a�non-US�GAAP�measure�and�is�calculated�as�the�last�four�quarters�of�FCFBIT�divided�by�the�last�four�quarters�of�EBITA�excluding�one-offs�

2

2022 Half Year Report

O P E R A T I N G A N D F I N A N C I A L R E V I E W ( C O N T I N U E D )

in millions, except share and per share information

Group�performance�overview

Statements�throughout�this�operating�and�financial�review�using�the� term�"the�Company"�refer�to�the�Adecco�Group��which�comprises� Adecco�Group�AG��a�Swiss�corporation��its�consolidated�subsidiaries�� as well�as�variable�interest�entities�for�which�the�Adecco�Group�is� considered�the�primary�beneficiary�

Revenues�

In�the�first�half�of�������revenues�of�EUR��������were�up�����year-on- year�on�a�reported�basis��Currency�movements�had�a�positive�impact�on� revenues�of�approximately����and�M&A�had�a�positive�impact�of� approximately�����while�the�number�of�working�days�impact�was� negligible��Revenue�growth�was�therefore����on�an�organic�and�trading� days�adjusted�basis�

By�Global�Business�Unit��GBU���revenues�in�Adecco�were�up�����up����

in�LHH�and�����in�Akkodis��all�compared�to�the�prior�year�on�an�organic� and�trading�days�adjusted�basis�

By�service�line��Flexible�Placement�revenues�were�up����year-on-year� organically��at�EUR��������Permanent�Placement�revenues�grew�by�����

to�EUR������revenues�from�Career�Transition�were�EUR������down�

�����revenues�in�Training��Upskilling�&�Reskilling�were�up�����to�EUR�

�����and�Outsourcing��Consulting�&�Other�Services�revenues�were�EUR�

�������up�����

Selling��general��and�administrative�expenses��SG&A��

SG&A�excluding�one-offs�was�EUR�������in�the�first�half�of�����������

higher�organically�compared�to�the�prior�year��SG&A�excluding�one-offs� as�a�percentage�of�revenues�was��������compared�to�������in�the� previous�year��Currency�movements�had�a�negative�impact�on�SG&A�of� approximately�����Reported�SG&A�was�EUR��������FTE�employees� increased�by�����organically�year-on-year��Compared�to�the�first�half�of�

������the�branch�network�organic�increase�was�negligible�

In�the�first�half�of�������one-off�costs�amounted�to�EUR�����These� included�restructuring�and�acquisition�related�costs�of��EUR����in� Corporate�Holding��mainly�related�to�the�AKKA�integration��EUR����in� LHH��EUR���in�Akkodis��EUR�����in�Adecco�DACH��and�EUR���in�Adecco� Americas��

Compensation�expenses�were�EUR�������in�the�first�half�of�������

compared�to�EUR�������in�the�same�period�of�������and�represented�

����of�total�SG&A��Marketing�expenses�were�EUR�����compared�to� EUR����in�the�first�half�of�������Bad�debt�expense�amounted�to�EUR���

in�the�first�half�of�������compared�to�EUR���in�previous�year�

SG&A�breakdown

HY�����

Gross�profit

Gross�profit�amounted�to�EUR�������in�the�first�half�of�������

up�����on�a�reported�basis�and�up����organically��The�gross�margin�was�

�����������bps�above�H��������Compared�to�the�prior�year��currency� increased�gross�margin�by����bps��while�M&A��primarily�the�acquisition� of�AKKA��had�a�positive�impact�of����bps��

On�an�organic�basis��the�gross�margin�was�up����bps��reflecting� expansion�of�����bps�in�Permanent�Placement�and����bps�in�Flexible� Placement��countered�by�Career�Transition��which�was����bps�lower�

Gross�margin�drivers�YoY

in�basis�points

HY�����

HY�����

Flexible�Placement

��

���

Permanent�Placement

���

��

Career�Transition

����

����

Other

��

Organic

��

���

Acquisitions�and�divestments

��

��

Currency�

��

����

Reported

���

���

F

G

A

DE

F

G

C

E

B CD

B

A

ACompensation expenses - 73%

Compensationexpenses

BPremisesPremisesexpensesexpenses- 6%

COfficeOffice& administrative&administrativeexpenses - 6%

  • expenses

D Depreciation - 3%

DDepreciation

E Marketing - 3%

E Marketing

F Bad debt expense - 0%

F Baddebtexpense

GOtherOther- 9%

3

2022 Half Year Report

O P E R A T I N G A N D F I N A N C I A L R E V I E W ( C O N T I N U E D )

in millions, except share and per share information

EBITA

Cash�flow�statement�and�net�debt�

EBITA�excluding�one-offs�was�EUR�����in�the�first�half�of�������

down�����on�a�reported�basis�year-on-year��and�down�����organically��The�EBITA�margin�excluding�one-offs�was�������down����bps�year-on- year�on�a�reported�basis�and�down�����bps�organically��

The�EBITA�conversion�ratio�excluding�one-offs��EBITA�excluding�one-offs�divided�by�gross�profit��was�������in�the�first�half�of������

compared�to�������in�the�prior�period��

Analysis�of�cash�flow�statements

The�following�table�illustrates�cash�flows�from�or�used�in�operating�� investing��and�financing�activities�

in�EUR

HY�����

HY�����

Summary�of�cash�flow�information

One-offs�amounted�to�EUR����

in�the�first�half�of������

and�EUR����in�

Cash�flows�from/�used�in��operating�

����

���

the�prior�period��EBITA�was�EUR�����

in�the�first�half�of������

compared�

activities�

to�EUR�����

in�the�prior�period��a�decrease�of�����

reported�and�����

Cash�used�in�investing�activities�

�������

����

organically��The�EBITA�margin�was������

in�the�first�half�of������

versus�

Cash�used�in�financing�activities�

�������

�����

�����in�the�prior�period�

Cash�flows�from�operating�activities�decreased�to�EUR������

in�the�first�

Amortisation�of�intangible�assets�

half�of������

from�EUR�����

in�the�same�period�of�������

with�the�

Amortisation�of�intangible�assets�was�EUR����

versus�EUR����

decrease�driven�by�less�favourable�net�working�capital�and�lower�Net�

in�H��������

income��due�to�the�aforementioned�performance�drivers��DSO�was����

Operating�income�

days�for�the�first�half�of������

and����

days�in�the�first�half�of�������

Cash�used�in�investing�activities�totalled�EUR�������

compared�to�EUR

Operating�income�was�EUR�����

in�the�first�half�of������

and�EUR

in�the�first�half�of������������

cash�outflow�has�been�mainly�driven�by�

in�the�first�half�of

the�acquisition�of�AKKA EUR��������

net�of�cash�and�restricted�cash�

Interest�expense�and�other�income/�expenses���

net�

acquired���

Capital�expenditures�amounted�to�EUR����in�the�first�half�of�

Interest�expense�was�EUR����

in�the�first�half�of������

compared�

�����and�EUR����

in�the�same�period�of������

Cash�used�in�financing�activities�totalled�EUR��������

compared�to�EUR�

to�EUR����

in�the�first�half�of�������

Other�income/�expenses

����in�the�prior�period�and�is�mainly�driven�by�the�acquisition�of�AKKA�in�

net�includes�interest�income foreign�exchange�gains�and�losses

������In�the�first�half�of�������

the�net�decrease�of�short-term�debt�

proportionate�net�income�of�investee�companies and�other�

totalled�EUR�����

whereas in�the�same�period�of�������

the�net�decrease�

non-operating�income/�expenses net In�the�first�half�of�������

other�

of�short-term�debt�totalled�EUR����

The�Company�paid�dividends�of�EUR�

income/�expenses net�amounted�to�an�expense�of�EUR����

compared�

����and�EUR�����

in�the�first�half�of������

and�the�first�half�of

to�an�expense�of�EUR���

in�the�same�period�of

respectively In�������

the�Company�repaid�long-term�debt�for�EUR

Provision�for�income�taxes

and�purchased�treasury�shares�for�EUR����

in�H��������

Provision�for�income�taxes�was�EUR����

in�the�first�half�of������

Net�debt�

compared�to�EUR�����

in�the�first�half�of�������

The�effective�tax�rate�

Net�debt�was�EUR�������

as�of����

June�������

compared�to�EUR

is�impacted�by�recurring�items such�as�tax�rates�in�the�different�

as�of����December�������

The�increase�in�net�debt�reflected�the�usual�

jurisdictions�where�the�Company�operates and�the�income�mix�within�

seasonal�trends�and�was�impacted�by�acquiring�full�control�of�AKKA�

jurisdictions It�is�also�affected�by�discrete�items�which�may�occur�in�

Technologies�as�well�as�the�payment�of�the�dividend�in�April�������

At�

any�given�year but�are�not�consistent�from�year�to�year In�the�first�half�

���June�������

the�ratio�of�net�debt�to�EBITDA�excluding�one-offs�on�a�

of�������

the�effective�tax�rate�was������

Discrete�events�decreased�

pro-forma�basis�was x compared�to����

x�at����

December�������

The�

the�effective�tax�rate�by�approximately�����

In�the�first�half�of

following�table�presents�the�calculation�of�net�debt�based�upon�financial�

the�effective�tax�rate�was�����

with�only�minimal�impact�from�

measures�in�accordance�with�US�GAAP�

discrete�events

Net�income�attributable�to�Adecco�Group�shareholders�

in�EUR

���June

���December

����

����

and�EPS

Net�debt

Net�income�attributable�to�Adecco�Group�shareholders�was�EUR�����

in�the�first�half�of�������

compared�to�EUR�����

in�the�prior�period��Basic�

Short-term�debt�and�current�maturities�

earnings�per�share�was�EUR������

in�the�first�half�of������

compared�to�

of�long-term�debt

���

���

EUR������

in�the�first�half�of�������

Adjusted�earnings�per�share�was�EUR�

Long-term�debt less�current�maturities�

�����

�����

�����in�the�first�half�of

compared�to�EUR

in�the�prior�year�

Total�debt

�����

�����

period�

Less��

Cash�and�cash�equivalents

���

�����

Short-term�investments

Net�debt

�����

��

4

2022 Half Year Report

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Adecco Group AG published this content on 04 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2022 04:56:01 UTC.