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View All NewsAdecco Q3 revenue falls; North America slows along with France, UK
The Adecco Group reported third-quarter revenue fell 4% year over year on an organic basis with adjustment for number of business days in the quarter; it’s a deceleration from the 3% decline in Q2. The Switzerland-based staffing giant reported the rate of revenue decline stabilized in most European countries except France and the UK, where staffing markets slowed. In North America, revenue decelerated.
Organic growth excludes the impact of currency, acquisitions and divestitures. On a reported basis, third-quarter revenue was down 2% year over year.
Adecco also today announced the sale of its US healthcare staffing business, Soliant Health, for $612 million.
| (€millions) | Q3 2019 | Q3 2018 | % change | % organic change | % organic, business days adjusted | Q3 2019 (US$millions) |
| Revenue | € 5,898 | € 5,996 | -2% | -3% | -4% | $6,451 |
| Gross profit | € 1,146 | € 1,124 | 2% | 0% | - | $1,253 |
| Gross margin | 19.4% | 18.7% | - | - | - | - |
| Net income | € 179 | € 270 | -34% | - | - | $196 |
Permanent placement revenue was flat year over year in the third quarter, according to Adecco.
In North America, the company said a slowdown in manufacturing affected growth. North America general staffing revenue fell 6% year over year on an organic basis adjusted for business days.
Professional staffing revenue in North America fell 6% on an organic basis and adjusted for business days. Adecco noted growth in its medical and science as well as its engineering and technical segments was offset by declines in its IT and finance segment along with its legal segment. Legal revenue was affected by the completion of a large number of projects.
Revenue by geography
| (€millions) | Q3 2019 | Q3 2018 | % change | % organic change | % organic, business days adjusted | Q3 2019 (US$millions) |
| France | € 1,393 | € 1,457 | -4% | -4% | -6% | $1,523 |
| North America, UK & Ireland General Staffing | € 730 | € 736 | -1% | -4% | -5% | $798 |
| North America, UK & Ireland Professional Staffing | € 848 | € 851 | 0% | -3% | -4% | $927 |
| Germany, Austria, Switzerland | € 492 | € 549 | -10% | -12% | -14% | $538 |
| Benelux and Nordics | € 480 | € 518 | -7% | -6% | -7% | $525 |
| Italy | € 463 | € 484 | -4% | -4% | -6% | $506 |
| Japan | € 380 | € 323 | 18% | 9% | 9% | $416 |
| Iberia | € 307 | € 281 | 9% | 9% | 6% | $336 |
| Rest of World | € 676 | € 683 | -1% | 0% | -2% | $739 |
| Career Transition & Talent Development | € 129 | € 114 | 13% | 10% | 10% | $141 |
Brexit uncertainty impacted the UK and Ireland market where general staffing revenue fell 3% on an organic, business day-adjusted basis. Professional staffing was down 1%.
In Germany, revenue fell amid the impact of weakness in the automotive and manufacturing sectors and by regulatory changes introduced in the fourth quarter. Adecco also cited weakness in manufacturing and automotive in Italy.
However, the company noted revenue was up in its “career transition and talent development” segment, which includes outplacement provider Lee Hecht Harrison and education firm General Assembly.
Revenue by business line
| (€millions) | Q3 2019 | Q3 2018 | % change | % constant currency | Q3 2019 (US$millions) |
| Office | € 1,369 | € 1,349 | 1% | 0% | $1,497 |
| Industrial | € 3,049 | € 3,215 | -5% | -5% | $3,335 |
| Information Technology | € 729 | € 719 | 1% | 0% | $797 |
| Engineering & Technical | € 184 | € 169 | 9% | 6% | $201 |
| Finance & Legal | € 255 | € 258 | -1% | -4% | $279 |
| Medical & Science | € 138 | € 131 | 5% | 2% | $151 |
| Career Transition & Talent Development | € 129 | € 114 | 13% | 10% | $141 |
| BPO | € 45 | € 41 | 8% | 6% | $49 |
BPO revenue includes MSP and RPO business lines.
Guidance
Adecco noted that revenue in September and October was down 4% year over year on an organic, business-day adjusted basis.
Share price and market cap
Shares in Adecco closed up 0.81% to 59.68 Swiss francs today in Europe; the company had a market cap of 9.66 billion Swiss francs.