Fourth-quarter revenue at Adecco, the world’s largest staffing firm, rose 5% on an organic basis and gross margin improved.

In North America, revenue edged up 1% on an organic basis to €1.22 billion (US$1.33 billion).

Adecco is the last of the big three agencies to report fourth-quarter earnings, and its 5% organic revenue compares to organic growth of 7% achieved by both Randstad and ManpowerGroup (NYSE: MAN). 

Adecco has also announced that it agreed to make a recommended cash offer for the entire ordinary share capital of UK recruitment firm Penna Consulting PLC. Adecco and Penna agreed to an offer of 365 pence per share, taking the total consideration to approximately £105 million.

Quote

“In Q4 2015 and for the full year, the Adecco Group delivered a strong operating performance, thanks again to the efforts of our more than 32,000 colleagues and roughly 700,000 associates around the world,” said Adecco CEO Alain Dehaze. “In 2015, we drove excellent operating leverage from our organic revenue growth of 4% and we achieved a strong margin of 5.2%. The Board of Directors’ proposal for a 14% increase in dividend per share reflects the Group’s continued good cash flow and strong balance sheet.

“At the start of 2016, our underlying revenue momentum has continued,” Dehaze continued. “In January and February combined, group revenue growth was 4% organically and adjusted for trading days. In January 2016, we announced our strategic priorities and new financial targets. The group’s focus now is to implement these strategic priorities across the organization and to balance revenue growth, profitability and cash generation, driving shareholder value creation in 2016 and in the long-term.”

Revenue by segment

Revenue by business line

Full-year revenue

All revenue changes in below country notes are reported on an organic basis, which excludes impact of currency, acquisitions and divestitures.

France

• Revenue rose 5%
• Industrial, which accounts for more than 85% of revenues, increased by 6%
• Construction returned to growth and growth accelerated in logistics, manufacturing and automotive
• Permanent placement revenue in France increased 14%

North America

• Revenue rose 1%
• General staffing accounts for approximately half of revenues, and declined by 1%
• In industrial, revenue rose 5% while in-office revenue declined by 8%
• Professional Staffing, revenue rose 1%, with growth of 21% in medical and science, 9% in finance and legal and 1% in IT, while engineering and technical declined by 9%
• Permanent placement revenues in North America were up 17%

UK and Ireland

• Revenue rose 1%
• Approximately two-thirds of revenues come from professional staffing, which declined by 1%
• Revenue increased by 2% in finance and legal, was flat in IT, and declined in engineering and technical
• Within general staffing, the majority of revenues are in office, which increased by 7%
• Permanent placement revenue in the UK and Ireland was flat

Germany and Austria

• Revenue rose 3%
• In industrial, which accounts for approximately 75% of revenue, revenue increased by 2%
• Revenue rose 7% in office and 4% in professional staffing

Japan

• Revenue rose 4%
• Revenues rose 3% in general staffing and 8% in the smaller professional staffing business, which comprises IT and engineering and technical

Italy

• Revenue growth remained strong at 19%

Benelux

• Revenue rose by 15%, with double-digit growth in all three countries in the region

Nordics

• Revenue fell 6%
• Sweden delivered double-digit revenue growth, while the decline continued in Norway, where the market environment remains challenging.

Iberia

• Revenue rose 13%

Australia and New Zealand

• Revenue growth was flat and EBITA was at breakeven, in difficult market conditions

Switzerland

• Revenue fell 2% in a challenging market due to the strength of the Swiss franc
• Factors negatively impacting profitability in the fourth quarter included continued pricing pressure, unfavorable mix effects, and costs related to adapting the business to the development in market conditions

Emerging markets

• Revenue growth remained strong at 16%, with double-digit growth in Latin America, Eastern Europe and MENA, and India

Lee Hecht Harrison

• In Adecco’s career transition and talent development business, revenue fell 2%, following the acquisition of Knightsbridge in Q2 2015