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View All NewsAdecco global revenue rises 9% in Q3; US operations affected by candidate scarcity and other issues
The Adecco Group reported global third-quarter revenue rose 9% year over year on an organic basis when adjusted for trading days. Meanwhile, the Switzerland-based staffing giant noted permanent placement revenue jumped 74% on an organic basis.
North American revenue, however, fell 9% in the third quarter with the US business challenged, the company said. Adecco reported that legacy issues in its US business, such as adverse sector mix, were further affected by candidate scarcity.
| (€millions) | Q3 2021 | Q3 2020 | % change | % organic change, business days adjusted | Q3 2021 (US$millions) |
| Revenue | € 5,220 | € 4,835 | 8% | 9% | $6,077 |
| Gross profit | € 1,086 | € 949 | 14% | 16% | $1,264 |
| Gross margin | 20.8% | 19.6% | - | - | - |
| Net income attributable to Adecco shareholders | € 133 | € 80 | 67% | - | $155 |
Overall, Americas revenue was down 3% year over year. In addition to North American results, Adecco reported the recent legislative changes in Mexico that prohibited temporary staffing had a “significant negative impact” on Latin American results. Still, Latin American revenue rose 13% on an organic basis.
Revenue by global business unit
| (€millions) | Q3 2021 | Q3 2020 | % change | % organic, business days adjusted | Q3 2021 (US$millions) |
| France | € 1,193 | € 1,079 | 11% | 10% | $1,389 |
| Northern Europe | € 602 | € 606 | -1% | -1% | $701 |
| Germany, Switzerland, Austria | € 359 | € 328 | 9% | 10% | $418 |
| Southern Europe, Eastern Europe, Middle East, Africa | € 975 | € 814 | 20% | 21% | $1,135 |
| Americas | € 592 | € 614 | -3% | -3% | $689 |
| Asia Pacific | € 487 | € 457 | 6% | 9% | $567 |
| LHH (Talent Solutions) | € 449 | € 409 | 10% | 9% | $523 |
| Modis | € 563 | € 528 | 7% | 14% | $655 |
In the company’s LHH segment, Pontoon revenue rose 9% with MSP and recruitment process outsourcing leading the growth. LHH career transition and talent development revenue fell 19% in the third quarter as the improving US economy cut down demand for outplacement. General Assembly revenue was down 12%. On the other hand, Adecco noted LHH’s global professional recruitment business rose 28% and US professional recruitment rose 26% amid strong demand for permanent placement.
Adecco’s Modis business saw revenue surpass 2019 levels. Third-quarter revenue rose 22% in the Americas, 13% in EMEA and 5% in Asia Pacific.
Revenue by service line
| (€millions) | Q3 2021 | Q3 2020 | % change | % organic (not trading days adjusted) | Q3 2021 (US$millions) |
| Flexible placement | € 4,303 | € 4,037 | 7% | 8% | $5,009 |
| Permanent placement | € 153 | € 89 | 72% | 74% | $178 |
| Career transition | € 68 | € 100 | -32% | -32% | $79 |
| Outsourcing, consulting and other services | € 623 | € 552 | 13% | 15% | $725 |
| Training, upskilling and reskilling | € 73 | € 57 | 27% | 27% | $85 |
Guidance
Adecco forecast fourth-quarter revenue would rise modestly on a sequential basis.
“Healthy demand is currently being impacted by issues created by the global pandemic, including supply chain shortages and talent scarcity,” according to the company. “This makes the path to recovery somewhat uneven in the months ahead.”
Share price and market cap
Shares in Adecco closed down 4.01% today in Switzerland to 45.03 Swiss francs (US$49.30); shares set a new 52-week low today when they reached 43.64 Swiss francs (US$47.78), according to FT.com. The company has a market cap of 7.87 billion Swiss francs (US$8.62 billion).