The Adecco Group today reported third-quarter revenue rose 5% on an organic basis — excluding the impact of currency, acquisitions and divestitures. Driving growth was strength in France, Italy, Iberia and Benelux. On the other hand, North American general staffing revenue (not including direct hire) fell by 5% on an organic basis, and North American professional staffing revenue was flat.

Business process outsourcing revenue, or BPO, fell 23% on a constant currency basis. BPO includes managed service provider and recruitment process outsourcing business lines.

Third-quarter gross margin narrowed, and net income fell 29% on a reported basis.

The company reported a noncash write-down of intangibles as a result of the streamlining of its brand portfolio that totaled €129 million (US$152.2 million). 

Under the new brand portfolio, “’General Staffing’ activities will operate under a single global ‘Adecco’ brand. ‘Professional Staffing and Solutions’ will focus on global lead brands, targeted on a specific skill sets and services.” All brands are being brought together under the “The Adecco Group,” corporate identity and brand positioning launched last January.

The Adecco Group in its earnings announcement today also highlighted its new online staffing platform YOSS, going live this month in France, and its continuing partnership with Mya Systems, the creator of an artificial intelligence-enabled chatbot. Mya this month completed an $18 million series B funding round.

Quote

“We continued to perform, with positive growth momentum and another quarter of strong productivity, as 2% organic growth in FTE employees supported underlying revenue growth of 6%,” CEO Alain Dehaze said. “Cash conversion also remained strong. We achieved this while investing in our key strategic initiatives: GrowTogether and Digital Ventures.”

Revenue by geography

Detail by country

All of the following revenue changes are reported on an organic basis:

France

• Permanent placement revenue was up 11% on the year. Revenue increased by 7% in general staffing, which accounts for over 90% of revenue, and declined by 1% in professional staffing.

North America, UK & Ireland General Staffing

• In North America, general staffing revenue fell 5%, and perm placement revenue rose 5%. In the UK and Ireland, general staffing revenue rose 17%, but permanent placement revenue fell 12%.

North America, UK & Ireland Professional Staffing

• North America professional staffing was flat, and permanent placement revenue rose by 4%. In the UK and Ireland, professional staffing revenue fell 9%, and permanent placement revenue fell by 27%.

Benelux and Nordics

• In the Nordics, revenue growth was 5%, driven by strong growth in Norway. Revenue in Benelux was up 12% on the year.

Italy

• Growth continued to be broad-based across service lines, according to the company.

Revenue by business line

Share price and market cap

Shares in Adecco closed down 1.02% to 77.45 Swiss francs. Market cap was 13.22 billion Swiss francs.