The Adecco Group (ADEN:VTX), reported revenue today of €5.96 billion in the third quarter ended 30 September 2023, an increase of 3% organically and trading days adjusted basis.

On a reported basis, revenue decreased by 1% over the previous year.

Denis Machuel, Adecco Group CEO, said, “In a challenging macroeconomic environment, the group delivered good growth and a stronger relative revenue performance, with a strengthened EBITA.”

“Adecco gained share in every region, with margin expansion delivered through pricing discipline, productivity gains, and good cost control,” Machuel said. “Adecco North America showed further positive signs of turnaround progress and achieved profitability. Akkodis continued to expand its consulting business while actively managing the significant downturn in the tech staffing market. This, combined with productivity gains and delivery of synergies, resulted in improved profitability. LHH delivered a strong margin, with very good growth in both Career Transition and Ezra.”

Revenue was in line with analyst forecasts, according to Reuters.

In the third quarter period, gross profit reached €1.24 million, up 1% organically (2% lower reported).

Net income was down 4% on a reported basis to a total of €103 million. The figure was better than the €82 million anticipated by analysts in a company-gathered consensus of forecasts, according to Reuters.

One-off costs were €27 million, compared to €23 million in the prior year period, reflecting restructuring charges from actions taken to secure targeted G&A (general and administrative) savings and AKKA integration and related costs.

At the Global Business Unit level, organically and TDA, Adecco revenues were up 4% (flat reported), Akkodis revenues were 3% lower on an organic basis (8% lower reported), and LHH revenues were 2% higher on an organic TDA basis, (4% lower reported).

By service line, growth was led by Career Transition, for whom revenues were up 87% organically (80% reported), while Outsourcing, Consulting and other Services grew 6% (3% reported). Flexible Placement revenues were up 1% (2% lower reported), Permanent Placement revenues were 26% lower (28% lower reported), and Training, Up-skilling & Re-skilling services revenues were 9% lower (12% lower reported).

Revenue by segment

Unless otherwise noted, all growth rates in this section refer to the same period in the prior year, with revenues stated on an organic and trading days adjusted (TDA) basis.

In Adecco France revenues were 2% lower, reflecting a subdued market backdrop. On an end-market basis, construction, healthcare, and autos were strong, while IT Tech and retail were weak.

Across Adecco Northern Europe, revenue from UK & Ireland were up 1%, reflecting recent contract wins. Revenues were 10% lower in the Nordics, impacted by new construction regulations. In Benelux, revenues were flat. The region’s growth outpaced the market. Strong growth in autos and public services was outweighed by challenging dynamics in IT Tech, financial services, and consulting.

Within Adecco DACH, revenue in Germany was up 10%, outperforming the market. Both Flexible Placement and Permanent Placement were strong, In Switzerland & Austria revenue was 1% lower, performing well against a tough market backdrop. Across the region, growth was generated mainly by autos, logistics and professional services.

In Southern Europe & EEMENA, revenue growth was strong, with Italy up 7%, Iberia up 11% and EEMENA up 12%. All segments gained market share. Flexible Placement growth was strong, while Permanent Placement was robust. In sector terms, growth was broad-based, led by logistics and autos.

In the Americas, Latin America revenue grew 23%, led by Argentina and Mexico. The region delivered good growth in Flexible Placement and strong growth in Outsourcing. Logistics, IT Tech, and healthcare were strong. In North America, revenue was 8% lower, outperforming a challenging market. Autos and consumer goods were solid, while IT Tech and financial services were subdued.

In APAC, revenue growth was strong across the region, with Japan up 13%, Asia up 9%, and India up 19%. In Australia & New Zealand, revenues were 73% higher, boosted by a significant new government contract. Both flexible placement and outsourcing activities were very strong. Market growth was broad-based, with public sector and retail performing notably well.

Akkodis’ revenue was 3% lower (8% lower reported), challenged by a sharp reduction in tech sector activity. Tech staffing revenues was 19% lower organically, while consulting revenues continued to be strong, growing 8% organically.

In LHH, recruitment Solutions revenue was 18% lower, reflecting subdued market activity, particularly in the US and UK, and across both permanent and flexible professional placement. The performance in Career Transition & Mobility was excellent as revenue rose 84%, led by the US. The segment continued to win new clients worldwide, particularly among SMEs. Its pipeline is solid, the group noted.

Learning & Development revenue was 21% lower, with General Assembly and Talent Development challenged by continued headwinds in their end markets. Ezra performed well, with revenues up 34%. Its pipeline is also strong. In Pontoon & Other, revenue in Pontoon was 4% higher, while revenue in Hired were subdued. Both units were challenged by the tech sector downturn.

Revenue by service line

“We are steadily improving our business as we execute methodically on our Simplify-Execute-Grow plan,” Machuel said. “Together with our leadership team, I am looking forward to sharing more on our plans to further strengthen the Adecco Group’s performance at our upcoming Capital Markets Day.”

Adecco Group exited the quarter with growth consistent with Q3 levels, and volumes in October were resilient. The company said the diversity of its activities and geographic footprint provides opportunities for profitable growth and market share gain while recognising elevated geopolitical and macroeconomic pressures. It expects Q4’s gross margin and SG&A expenses as a percentage of revenues to be around Q3 23 levels.

Separately today, Adecco Group announced the appointment of Daniela Seabrook as chief human resources officer and member of the Executive Committee, effective 1 January 2024.

Seabrook brings to the group a wealth of international HR leadership experience, with a particular focus on talent, culture, change management and organisational effectiveness, the group stated. She was most recently chief human resources officer at Philips, and previously, she spent over 12 years at Syngenta, including as group head people and organisational development.

Seabrook succeeds Gordana Landen, who will retire on 31 January 2024. Landen has served as chief human resources officer of the group since January 2019 and has been instrumental in improving the company’s talent management processes and strengthening its commitment to a diverse and inclusive culture.

“The group thanks Gordana for her tireless leadership in building its strong HR foundation,” the company stated.

Adecco Group set a new 52-week high during today's trading session when it reached CHF 39.36 (€40.92). Over this period, the share price is up 26.80%. The company last traded at CHF 38.80 (€40.33), up 12.40% on the day. The company has a market cap of CHF 5.80 billion (€6.03 billion).