The Adecco Group reported revenue of €5.99 billion (US$6.53 billion) for the second quarter ended June 30. Revenue was up 3% organically and up 4% on an organic and trading days adjusted (TDA) basis. 

“The group delivered another quarter of revenue acceleration and market share gain,” said Adecco Group CEO Denis Machuel. “The Adecco business achieved growth across all regions at a level that continued to outpace its competitors, and with underlying margin improvement.” 

Adecco has outperformed its closest peers this quarter. Rival Randstad last month reported organic revenue per working day fell by 5.1% in Q2 2023 citing challenging market conditions. ManpowerGroup also cited a challenging environment, reporting second quarter revenue fell 3.5% year over year in constant currency to $4.86 billion. 

“It’s true, the overall macro-economic situation is not the best,” Adecco CEO Denis Machuel told Reuters. “We see some indications of slowing down. We are seeing companies being more cautious when it comes to permanent hiring, candidates are also being more cautious. When it’s cold outside, you tend to stay home.” 

Chief Financial Officer Coram Williams said hiring levels were “very modestly down.” 

EBITA excluding one-offs was €184 million (US$200.4 million), compared to €205 million (US$223.3 million) in the prior-year period. The group generated an operating income of €117 million (US$127.4 million), flat in constant currency terms. 

Net income attributable to Adecco Group shareholders was €62 million (US$67.5 million), compared to €77 million (US$83.9 million) in the prior year period. The result reflects interest expense of €20 million (US$21.8 million), and other income/(expenses), net of €9 million (US$9.8 million). 

Unless otherwise noted, all growth rates below refer to the same period in the prior year, with revenues stated on an organic and TDA basis. In France, revenue growth was supported by the autos and healthcare sectors, while logistics, construction and retail were soft. Growth was strong in permanent placement, and robust in flexible placement. 

In Northern Europe, revenue from UK & Ireland was up 7%, with growth led by autos and public sector activity. Revenue was 1% lower in the Nordics, with new construction regulations constraining activity. In the Benelux, revenue was down 1%. Overall, the region’s growth outpaced the market. 

Within DACH, revenue in Germany was up 11%, outperforming the market. In Switzerland  and Austria, revenue was 1% higher year over year, with Switzerland impacted by a tough market backdrop. Growth was generated mainly by autos, logistics and professional services. 

In Southern Europe, revenue growth was strong, with Iberia up 11%; Eastern Europe, Middle East and North Africa up 19%; and Italy up 6%. 

Latin America revenue grew by 22%. In North America, revenues were 7% lower, impacted by a tougher macroeconomic environment. In Adecco US, revenue developments outperformed the market and improved by 2% on a sequential basis. 

In APAC, revenue was 12% higher in Japan, up 10% in Asia and up 20% in India. Revenue in Australia and New Zealand was flat, weighed by the end of a large government contract. 

Akkodis’ revenue was 1% lower (3% lower reported). Reflecting a sharp downturn in tech sector activity, staffing revenue was 25% lower. Consulting and solutions revenue was strong, growing by 12%. 

“Akkodis delivered strong growth in consulting with excellent progress in the US; while the staffing side of the business was hindered by hiring contraction in the tech sector. Integration work and synergy capture is advancing smoothly,” Machuel said. 

Revenue in LHH was flat (-3% reported) in the second quarter. However, by service line, growth was very strong in the counter-cyclical Career Transition segment, where revenue doubled and where LHH is a market leader. 

“In LHH, both the Career Transition and Ezra businesses delivered record quarters and profitability strengthened for the GBU (global business unit) overall,” Machuel said. 

“Across the group we continue to drive productivity and cost discipline, with G&A (general and administrative) down in the quarter and delivery against the committed savings plan firmly on track,” Machuel said. “Looking ahead, while recognizing a challenging macro-economic environment, we see positive momentum, driven by the strength of our unique portfolio and our relentless focus on performance.” 

“We know there is a lot of uncertainty around, linked to the war in Ukraine, rising interest rates. But we think there is an opportunity to take market share,” Machuel told Reuters. 

The group said it is on track to deliver its general and administrative savings plan of €150 million ($163.4 million) in run-rate terms by the end H1 2024. Of the targeted savings, approximately 75% will come from the introduction of a streamlined operating model. The remainder will come from the optimization of shared functions and expense rationalization. The group targets a year-end run-rate savings level of approximately €60 million (US$65.3 million). 

While macroeconomic conditions remain challenging, the diversity of the group’s activities and geographic footprint provide continued opportunity for profitable growth and market share gain, the company stated. The group will manage its resources with agility, adapting to market dynamics, it added. 

The Adecco Group expects third-quarter gross margin to be around second-quarter 2023 levels, while selling, general and administrative expenses should be slightly lower on a sequential basis. 

The Adecco Group also announced today the appointment of Caroline Basyn as chief digital and IT officer and member of the executive committee. 

Basyn will join the company on Aug. 28. She is a seasoned international business and technology executive with more than 30 years’ leadership experience in digital transformation and leveraging technology innovations, including as chief strategy and transformation officer Europe for PepsiCo. She is tasked with leading Adecco’s combined digital and IT function and driving growth through digital and AI. 

Click chart to enlarge.

Share price and market cap 

Shares in Adecco closed up 6.54% to 37.12 Swiss francs (US$42.34) today in Europe; they set a new 52-week high when they reached 37.73 Swiss francs (US$43.03), according to FT.com. The company had a market cap of 5.86 billion Swiss francs (US$6.68 billion).