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View All NewsAdecco’s revenue growth slows to 2% on organic basis
The Adecco Group, the world’s largest staffing provider, reported third-quarter revenue rose 2% on an organic basis, which excludes the effect of currency as well as acquisitions and divestitures. Organic growth decelerated from the 5% pace achieved in the second quarter, primarily due to lower growth in a number of European markets.
Gross margin improved by 20 basis points year over year to 18.7%, driven by perm, General Assembly and Vettery.
| (€millions) | Q3 2018 | Q3 2017 | % change | % change on an organic basis | % change on an organic basis, business days adjusted | Q3 2018 (US$millions) |
| Revenue | € 5,996 | € 5,901 | 2% | 2% | 2% | $6,956 |
| Gross profit | € 1,124 | € 1,091 | 3% | 1% | - | $1,304 |
| Gross margin | 18.7% | 18.5% | - | - | - | - |
| Net income attributable to Adecco Group shareholders | € 270 | € 123 | 119% | - | - | $313 |
In North America, general staffing revenue was flat; growth was affected by volume reductions at a few large clients and improved toward the end of the quarter as new client wins ramped up. North America’s professional staffing revenue fell 3% as growth in finance & legal and medical & science was offset by a decline in IT and engineering & technical.
However, permanent placement revenue increased by 21% in North America.
Business Process Outsourcing revenue, which includes MSP and RPO business lines, rose 29% on an organic basis in the quarter. Revenue in the company’s Career Transition & Talent Development segment, which includes outplacement provider Lee Hecht Harrison and recently acquired training provider General Assembly, rose 19% on an organic basis.
Revenue by geography
| (€millions) | Q3 2018 | Q3 2017 | % change | % change on an organic basis | Q3 2018 (US$millions) |
| France | € 1,457 | € 1,384 | 5% | 5% | $1,690 |
| North America, UK & Ireland General Staffing | € 736 | € 732 | 1% | 0% | $854 |
| North America, UK & Ireland Professional Staffing | € 851 | € 853 | 0% | -2% | $987 |
| Germany, Austria, Switzerland | € 549 | € 564 | -3% | -2% | $637 |
| Benelux and Nordics | € 518 | € 536 | -3% | -2% | $601 |
| Italy | € 484 | € 458 | 6% | 6% | $561 |
| Japan | € 323 | € 306 | 5% | 4% | $375 |
| Iberia | € 281 | € 284 | -1% | -1% | $326 |
| Rest of World | € 683 | € 687 | 0% | 6% | $792 |
| Career Transition & Talent Development | € 114 | € 97 | 18% | -4% | $132 |
Quote
“As we communicated during our September investor seminar, trading in Q3 2018 was challenging, with growth slowing in a number of European markets,” said CEO Alain Dehaze. “Against this backdrop, overall the group delivered a solid performance.”
Revenue by business line
| (€millions) | Q3 2018 | Q3 2017 | % change | % change constant currency | Q3 2018 (US$millions) |
| Office | € 1,350 | € 1,344 | 0% | 2% | $1,566 |
| Industrial | € 3,212 | € 3,174 | 1% | 2% | $3,726 |
| Information Technology | € 634 | € 617 | 3% | 3% | $736 |
| Engineering & Technical | € 244 | € 268 | -9% | -9% | $283 |
| Finance & Legal | € 258 | € 249 | 4% | 3% | $299 |
| Medical & Science | € 131 | € 111 | 18% | 17% | $152 |
| Career Transition & Talent Development | € 114 | € 97 | 18% | 19% | $132 |
| BPO | € 53 | € 41 | 29% | 29% | $61 |
The Adecco Group in July agreed to sell its remaining 43% ownership interest in Beeline. The transaction, completed in August, resulted in a gain on sale of €113 million (US$131 million) and before-tax cash proceeds of €226 million (US$262 million). The divestiture was part of The Adecco Group’s strategy to bring more focus and discipline to portfolio management; in the full-year 2017 and the first six months of 2018, The Adecco Group did not recognize any earnings relating to its investment in Beeline.
Adecco’s full earnings report is available online.
Share price and market cap
Adecco shares were up 2.87% today in Switzerland to 49.41 Swiss francs at 10:55 a.m. Eastern time; the company had a market cap of 8.02 billion Swiss francs, according to FT.com.