Adecco : May 4, 2021 ROBUST START TO 2021

Results release

Q1 2021

ROBUST START TO 2021

Further strengthening of margin through delivery of strategy

Summary and highlights

• Revenues up 2% year-on-year organically1 and trading days adjusted (TDA)
• Gross margin 20.1%, up 80 bps yoy, driven by improved mix and pricing discipline
• EBITA2 margin excluding one-offs3 4.2%, up 120 bps yoy, with positive gross margin performance further supported by productivity improvement
• Strong financial position and cash flow development: Net Debt/EBITDA4 excluding one-offs 0.3x, Free Cash Flow5 at EUR 89 million. Share buyback commenced in April
• Revenues in March 2021 up 9% organically and TDA, with volumes in April indicating gradual sequential recovery

"The Group had a robust start to 2021, showing continued resilience and sector-leading profitability. Despite the ongoing challenges from Covid-19, we returned to modest revenue growth, and several businesses are now back above 2019 levels. Positive mix development, pricing and cost discipline drove broad-based margin improvement. With our diversified portfolio of services we support our clients and candidates with the solutions they need to adapt to the future of work. As an essential service provider, we have an important role to play in helping society successfully exit from the current crisis, supporting a recovery in employment and a safe return to work for all."

Since launching our Future@Work strategy at the end of last year, we have made good progress. We successfully transitioned to a new organisation structure built around three Global Business Units - Adecco, Talent Solutions and Modis - and several key strategic initiatives are well underway.

We are encouraged to see continued recovery, though we are mindful of uncertainties related to Covid-19 and the economic environment. Our unparalleled service range, operational agility and strong financial position provide a platform for generating long-term value for all our stakeholders, and delivering on our ambitious financial targets over the medium term. While the economic recovery may remain uneven, we will continue to implement our strategy with one clear objective: to make the future work for everyone."

Alain Dehaze, Chief Executive Officer

__________________________________________________________________

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

• EBITA is a non-US GAAP measure and refers to operating income before amortisation and impairment of goodwill and intangible assets.
  3 In Q1 2021, EBITA included one-offs of EUR 6 million; in Q1 2020, EBITA included one-offs of EUR 18 million.
  4 Net debt and Net debt to EBITDA are non-US GAAP measures. Net debt comprises short-term and long-term debt less cash and cash equivalents and short-term investments. Net debt to EBITDA is calculated as net debt at period end divided by last 4 quarters of EBITA excluding one-offs plus depreciation. 5 Free cash flow is a non-US GAAP measure and comprises cash flows from operating activities less capital expenditures.

Q1 2021 results | adeccogroup.com

4 May 2021 | Page 1 of 13

Key figures overview

			Change
EURmillionsunlessstated	Q	Q	Reported	Organic
Summaryofincome
statementinformation
				IMN
Revenues	!"#	GHIJK	LJM
GrossOprofit	""$	KKP	QM	GM
EBITAOexcludingOoneLoffs	#	IGP	JPM	PRM
EBITA		IJN	PSM	GSM
NetOincome/TlossUOattributableOtoO
		TJPVUOS
AdeccoOGroupOshareholders		nWmW
DilutedOEPSOTEURU	%#&	TRWIPUOS	nWmW
GrossOmargin	%	IKWJM	VQObps	VQObps
EBITAOmarginOexcludingOoneLoffs	%	JWQM	IRQObps	IRQObps
EBITAOmargin	%	RWNM	IPQObps	IPQObps
Summaryofcashflow
andnetdebtinformation
FreeOcashOflowObeforeOinterestO
andOtaxOpaidOTFCFBITU	#	VK
FreeOcashOflowOTFCFUO
$"	JQ
NetOdebt	#	JVV
DaysOsalesOoutstanding	)	GJ
CashOconversionV
#	KQM
NetOdebtOtoOEBITDAOexcludingOoneLoffs	%*x	QWJx

• In Q1 2021, organic revenue increased by 1%, or 2% trading days adjusted (TDA).
  7 Includes goodwill impairment of EUR 362 million.
  8 Cash conversion is a non-US GAAP measure and is calculated as last 4 quarters of FCFBIT divided by last 4 quarters of EBITA excluding one-offs.

Q1 2021 financial performance

Group performance overview

Revenues in Q1 2021 were up by 2%, organically and trading days adjusted (TDA). The year-on-year revenue trend improved through the quarter, influenced by the prior year comparison base, with January and February 2021 combined down 2% and March up 9% TDA. When compared to Q1 2019, first quarter revenues were 8% lower. Adecco returned to growth, up 2% TDA, driven by strong performance in Southern Europe & EEMENA, and stabilisation in the majority of other regions. Talent Solutions was flat, with growth in LHH and GA. In the later-cycle Modis business, revenues were down 3%, with growth in consulting not fully compensating lower revenues in flexible placement.

Focus on strengthening the business mix and price discipline drove an improvement in gross margin, which was 20.1%, up 80 bps year-on-year on a reported basis and also organically. EBITA margin excluding one-offs was 4.2%, up 120 bps year-on-year, reflecting gross margin improvement and cost discipline, with SG&A down 2% year-on-year organically and excluding one-offs. Cash flow remained strong, with DSO at 51 days, improving by two days compared to the prior year, and with cash conversion at 117%.

Q1 2021 results | adeccogroup.com

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Revenues

Q1 2021 revenues were EUR 4,971 million, down 3% year-on-year on a reported basis. Currency movements and divestments had a negative impact on revenues of approximately 3.5% and 0.5% respectively, while the number of working days had a negative impact of approximately 1%. Revenue growth was therefore 2% on an organic and trading days adjusted basis.

By Global Business Unit (GBU): revenues in Adecco were up 2%, Talent Solutions was flat, while Modis revenues were down 3%, all compared to the prior year on an organic basis and trading days adjusted.

By service line: flexible placement revenues were flat year-on-year organically, at EUR 4,088 million; permanent placement revenues declined by 11% to EUR 117 million; revenues from career transition were EUR 94 million, up 4%; revenues in training, upskilling & reskilling were up 28%, to EUR 79 million, and outsourcing, consulting & other services were EUR 593 million, up 7%.

Gross Profit

Gross profit was EUR 998 million in Q1 2021, flat on a reported basis and up 5% organically. Gross margin was 20.1%, up 80 bps compared to Q1 2020. Currency had a negative impact of 10 bps while M&A had a positive impact of 10 bps. Therefore, on an organic basis, the gross margin was also up 80 bps, with positive contributions from flexible placement (+80 bps), career transition (+10 bps) and other services (+20 bps), partly offset by permanent placement (-30 bps). The temporary staffing gross margin benefitted from Covid-19 employment support schemes in Adecco Americas and Adecco Northern Europe, which added approximately 20 basis points to gross margin.

Selling, General and Administrative Expenses (SG&A)

SG&A excluding one-offs was EUR 800 million in Q1 2021, down 6% year-on-year on a reported basis or down 2% organically. Average FTE employees were 31,174, down 6% organically year-on-year. The number of branches declined by 9% organically year-on-year. Q1 2021 reported SG&A included restructuring costs of EUR 6 million, compared to EUR 16 million of restructuring costs and EUR 2 million of acquisition-related costs in the same period of the prior year.

EBITA

EBITA in Q1 2021 was EUR 201 million, which included EUR 8 million from the Group's FESCO Adecco JV in China. EBITA excluding one-offs was EUR 207 million, up 42% organically. EBITA margin excluding one-offs was 4.2%,

up 120 bps year-on-year in reported terms and also organically. The conversion ratio of gross profit into EBITA excluding one-offs was 20.7%, up 520 bps on a reported basis year-on-year.

Amortisation of Intangible Assets and Impairment of Goodwill

Amortisation of intangible assets was EUR 19 million, compared to EUR 21 million in Q1 2020. In the same period of the prior year the Group recognised a goodwill impairment of EUR 362 million.

Operating Income/(Loss)

The Group generated an operating income in Q1 2021 of EUR 182 million. In Q1 2020, the Group reported an operating loss of EUR 247 million, driven by the goodwill impairment.

Interest Expense and Other Income/(Expenses), net

Interest expense was EUR 7 million, compared to EUR 8 million in Q1 2020. Other income/(expenses), net had an EUR 1 million favourable impact, compared to a neutral impact in Q1 2020.

Q1 2021 results | adeccogroup.com

4 May 2021 | Page 3 of 13

Provision for Income Taxes

In Q1 2021, the effective tax rate (ETR) was 30%, compared to 51% in Q1 2020. Discrete events had no impact on the ETR in Q1 2021, whereas they increased the effective tax rate by around 6% in the prior year period. The effective tax rate excluding discrete events was therefore 30% in Q1 2021, compared to 45% in Q1 2020. The decline year-on-year mainly relates to the reduction in the French business tax ("CVAE") and the improvement in net income before taxes.

Net Income/(Loss) Attributable to Adecco Group Shareholders and EPS

Net income attributable to Adecco Group shareholders was EUR 124 million, compared to a net loss of EUR 348 million in Q1 2020, which was driven by the goodwill impairment. Basic EPS was EUR 0.77 compared to EUR (2.15) in Q1 2020.

Cash Flow and Net Debt

Cash flow from operating activities was EUR 114 million in Q1 2021, compared to EUR 69 million in Q1 2020. The higher cash flow year-on-year was mainly driven by the higher profitability. DSO was 51 days in Q1 2021, down 2 days compared to the prior year. The rolling last four quarters cash conversion ratio was 117%, compared to 90% in Q1 2020. Net debt was EUR 227 million at 31 March 2021, compared to EUR 376 million at 31 December 2020 and EUR 388 million at

31 March 2020. Net debt to EBITDA excluding one-offs was 0.3x, compared to 0.4x at 31 December 2020 and 0.3x in the same period of the prior year.

Q1 2021 segment operating performance

Revenues and revenue growth

	Revenues			Variance			ofrevenues
EUROmillionsOunlessOstated	Q	Q		Reported	Organic	OrganicTDA"		Q
AdeccoOFrance	IHQPQ	IHQGI		LIM	LIM	QM		RIM
AdeccoONorthernOEurope	NPI	NGS		LJM	LIM	QM		IJM
AdeccoODACH	JPI	JGQ		LJM	LRM	QM		SM
AdeccoOSouthernOEuropeO&OEEMENA	KQV	VRG		IQM	IIM	IJM		IVM
AdeccoOAmericas	NII	NKJ		LIRM	LRM	QM		IRM
AdeccoOAPAC	PNN	PKR		LGM	QM	LRM		IQM
Adecco	!#	!&$		1				VIM
TalentSolutions	&	#&		1&				KM
Modis	)$	)")		1*	1	1*		IQM
AdeccoGroup	!"#	)!*"		1*				IQQM

EBITA and EBITA margin excluding one-offs

		EBITAexcludingone1offs			EBITAmarginexcludingone1offs		ofEBITA
EUROmillionsOunlessOstated	Q	Q	Q	Q	Variance		Q
AdeccoOFrance	GI	GQ	PWKM	PWSM	RQObps		RIM
AdeccoONorthernOEurope	IV	P	RWVM	QWSM	RIQObps		SM
AdeccoODACH	J	TJU	IWQM	LQWKM	IKQObps		IM
AdeccoOSouthernOEuropeO&OEEMENA	GI	JV	GWNM	PWSM	KQObps		RIM
AdeccoOAmericas	RQ	IP	JWRM	RWIM	IIQObps		VM
AdeccoOAPAC	JJ	RV	SWQM	GWNM	IPQObps		IJM
Adecco	ISN	*	%	*%	bps		SIM
TalentSolutions	JK	*)			$%#	#%	*bps		INM
Modis	JI	*	&%	)%	bps		IJM
Corporate	TJKU	6 7
AdeccoGroup	RQS	)	%	*%	bps		IQQM

• TDA = trading days adjusted.

1. % of EBITA excluding one-offs and before Corporate.
2. See page 10 for a reconciliation of EBITA to EBITA excluding one-offs by segment.

Q1 2021 results | adeccogroup.com

4 May 2021 | Page 4 of 13

Note: all revenue growth rates in this section are year-on-year on an organic basis and trading days adjusted (TDA), unless otherwise stated

In Adecco, total revenues were EUR 4,007 million, up 2% year-on-year. Growth was driven by Southern Europe & EEMENA, with most other regions flat year-on-year and APAC slightly lower. EBITA excluding one offs was EUR 176 million with a margin of 4.4%, up 120 bps year-on-year. Further details by region can be found below.

Adecco France revenues were EUR 1,040 million, flat when compared to the prior year. Growth in logistics and transportation was offset by challenges in automotive and retail. EBITA excluding one offs was EUR 51 million with a margin of 4.9%, up 20 bps year-on-year. Good progress on increasing the proportion of revenues from higher-margin solutions (e.g. outsourcing, training), was partly offset by increased employee profit sharing linked to regulatory changes.

Adecco Northern Europe revenues were EUR 641 million, flat when compared to prior year. Revenue performance varied across the region. UK & Ireland grew by 13%, driven by strength in logistics and e-commerce. Revenues in Benelux declined by 12%, and the Nordics declined by 8%. Overall EBITA excluding one-offs was EUR 18 million, with a margin of 2.8%, up 210 bps versus the prior year. Margin improvement was driven by client mix, Covid-19 employment support schemes and strong cost discipline.

Adecco DACH revenues were EUR 341 million, flat year-on-year. Germany grew by 1%, while Switzerland & Austria declined by 4%. Double-digit growth in logistics and public sector clients was offset by lower demand from automotive, aerospace and retail. Overall EBITA excluding one-offs was EUR 3 million with a margin of 1.0%, up 190 bps year-on-year. The improvement was driven by lower bench costs, improved mix and pricing, as well as the benefit of restructuring actions in Germany during 2020.

Adecco Southern Europe & EEMENA revenues were EUR 908 million, up 13%. Revenues in Italy were up 21%, Iberia was up 3% and EEMENA grew by 9%. Growth was driven by higher demand from logistics and manufacturing clients. For the region, EBITA was EUR 51 million, with a margin of 5.6%, up 90 bps year-on-year driven by strong productivity gains.

Adecco Americas revenues were flat year-on-year at EUR 611 million. Strong growth in Latin America, up 23%, was offset by declines in North America, down 9%. The recovery in North America was held back by lower exposure to the more dynamic areas of the economy, such as logistics and transportation, and reduced demand in automotive. Overall EBITA was EUR 20 million, with a margin of 3.2%, compared to 2.1% in Q1 2020, supported by improved business mix and Covid-19 employment support schemes.

Adecco APAC revenues were EUR 466 million, down 2%. Revenue growth remained solid in Japan, up 3%, and Australia & New Zealand, up 2%. Asia decreased by 1%. India declined by 38%, linked to the exit of certain lower-margin activities in 2020. EBITA excluding one-offs was EUR 33 million and the margin was 7.0%, up 140 bps year-on-year, supported by good growth in higher-margin outsourcing activities.

In Talent Solutions, revenues were EUR 446 million, flat year-on-year. LHH (formerly Lee Hecht Harrison) grew organically by 7%. Lower activity in counter-cyclical career transition in the US, linked to the improving economy, was partly offset by stronger demand in Europe and an acceleration in talent development activities globally. General Assembly was up 1% organically, driven by strong demand in B2B. US Professional Recruitment revenues were flat compared to the prior year, with improving momentum through the quarter, particularly in permanent placement. Global Professional Recruitment revenues were down 6%. Pontoon declined by 4%, driven by lower revenues in lower-margin direct sourcing activities, with good growth in MSP and RPO. EBITA excluding one-offs was EUR 39 million and the EBITA margin was 8.7%, up 130 bps year-on-year. Improved pricing/business mix and productivity were partly offset by investments in digital capabilities.

Q1 2021 results | adeccogroup.com

4 May 2021 | Page 5 of 13