The Adecco Group: CONTINUED GROWTH AND STRATEGIC PROGRESS IN Q1 2018
May 08, 2018 at 01:05 am EDT
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CONTINUED GROWTH AND STRATEGIC PROGRESS IN Q1 2018
Good underlying growth; one-offs and investments impact profitability
Summary and highlights
Revenue growth 6% organically1 and trading days adjusted
Strong performance in permanent placement, revenues up 18% organically
Gross margin impacted by the timing of bank holidays (-25 bps), higher sickness rates and strikes in Germany (-10 bps), and lower CICE (-15 bps). Trend in price and mix slightly improved (-10 bps)
EBITA2 margin excluding one-offs3 3.8%; down 100 bps, due to lower gross margin, FTE growth and strategic investments. Trend to improve from Q2, as impact of investments reduces and bank holidays are favourable
Net income attributable to Adecco Group shareholders EUR 130 million
Revenues in March and April up 5-6%, organically and trading days adjusted
Acquisition of General Assembly will expand the Adecco Group's up-/re-skilling offering, creating unique solutions to address clients' unmet needs for in-demand 21st-century skills
"In Q1 2018, we continued to invest in the transformation and digitalisation of the Adecco Group, within the framework of our Perform, Transform and Innovate agenda. On the Perform pillar, underlying revenue growth remained good, including an acceleration to 10% in France, where we are again growing in-line with the market. The EBITA margin was negatively impacted by several non-underlying factors and ongoing investments in our strategic initiatives. These effects will reduce during the remainder of 2018. In addition, we will further intensify our focus on driving strong productivity growth from recent headcount investments. GrowTogether is also on track to deliver EUR 50 million of benefits in the second half of 2018.
On the Transform and Innovate agendas, new systems such as our Integrated Front-Office (InFO) and customer portals are transforming the way we interact with clients, candidates and associates. The recently announced acquisition of General Assembly is a further significant development, creating a unique combined value proposition, at the intersection of education and employment.
Over the last 12 months, significant progress has been made in the strategic development of the Group. We are embedding best practices and deploying new tools to strengthen our core businesses. And we have expanded our solutions portfolio, organically and via targeted M&A, to include leading platforms in online staffing (Adia), freelance (YOSS), digital permanent recruitment (Vettery) and now up-/re-skilling (General Assembly). With these actions we are leveraging the workforce megatrends and taking the Group into attractive adjacent markets, supporting our commitment to accelerate structural revenue growth, improve margins and drive continued strong cash flow.
I look forward to more progress during 2018, as we further embed our strategic programmes, and would like to thank our more than 34,000 colleagues for their commitment to that cause."
Alain Dehaze, Group Chief Executive Officer
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Adecco Group AG, formerly Adecco S.A., provides human resource (HR) services. The Company's services include temporary staffing, permanent placement, outsourcing, career transition. It operates through two business lines: Staffing and Solutions. The Staffing business line includes General Staffing, which includes Office and Industrial, and Professional Staffing, which includes Information Technology, Engineering and Technical, Finance and Legal, and Medical and Science. The Solutions business line includes Business Process Outsourcing, which includes Managed Service Programs, Recruitment Process Outsourcing and Vendor Management System, and Career Transition and Talent Development, which includes outplacement, career development, change management solutions, training and consulting. Its segments include France, North America, UK & Ireland, Germany & Austria, Japan, Italy, Benelux, Nordics, Iberia, Australia & New Zealand, Switzerland, Emerging Markets and Lee Hecht Harrison.