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 | ||
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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 |
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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.