The Adecco Group (ADEN:VTX), reported revenue of €6.10 billion during the fourth quarter ended 31 December 2023, an increase of 1% organically and trading days adjusted (TDA).

Denis Machuel, Adecco Group CEO, said, “The group delivered a strong finish to 2023 in a challenging market environment, continuing to gain share while further improving profitability through productivity and disciplined cost reduction.”

Machuel added, “Adecco achieved market share gains for the sixth consecutive quarter, while improving margin. Akkodis faced market headwinds yet still delivered growth in Consulting and a strong EBITA margin driven by excellent synergy capture. In LHH, both Career Transition and Ezra delivered further exceptional growth.”

The group’s operating income of €187 million beat analyst forecasts of €151 million, according to Reuters.

Selling, general & administrative expenses (SG&A) excluding one-offs was €968 million, 8% lower organically (11% reported).

EBITA excluding one-offs was €264 million up 16% on a reported basis from the €228 million delivered in the prior year period and an increase of 20% on an organic basis.

The net income attributable to Adecco Group shareholders was €68 million, 6% higher year-on-year, reflecting stronger operational performance.

Revenue by geography

Unless otherwise noted, all growth rates below refer to same period in prior year, and on an organic and trading days adjusted basis.

Revenue in Adecco France was 5% lower, reflecting a broad-based easing of demand in the market, particularly in retail, manufacturing, food & beverages, and logistics.

In Adecco Northern Europe, revenue from UK & Ireland was up 1% and in Benelux up 2%. Revenue was 11% lower in the Nordics, impacted by new regulations in the construction sector. In sector terms, consulting and financial services were weak, while manufacturing was soft.

In DACH, revenue in Germany was up 12%, outperforming the market. The results contrasted sharply with Randstad’s performance in Germany during Q4 2023 where revenue dropped 18%. Flexible Placement was strong, supported by strong logistics and autos demand. In Switzerland & Austria revenue was up 2%, performing well against a tough market backdrop.

In Adecco Southern Europe & EEMENA revenue growth was strong, with Italy up 10%, Iberia up 13% and EEMENA up 9%. All segments gained market share. Flexible Placement was strong across the region, led by logistics and autos, while manufacturing was soft.

In Adecco Americas, Latin America revenue grew 32%, led by Brazil and Colombia. The region delivered strong growth across all service lines. Retail, autos, logistics, and IT Tech sectors were strong. In North America, revenue was 13% lower in a challenging market. The region faced continued and broad-based weakness in market demand, particularly in IT tech, logistics and retail. Despite these headwinds, management secured ongoing improvement in operational KPIs.

Across Adecco APAC revenue growth was strong across the region, with Japan up 8%, Asia up 7%, and India up 11%. In Australia & New Zealand, revenue was 65% higher, boosted by a significant government contract.

Overall, revenue in the Adecco global business unit level grew by 3% on a constant currency basis amid a slowing trading environment.

Akkodis’ revenue was 5% lower (8% lower reported), challenged by a continued downturn in tech sector activity. Staffing revenue was 14% lower organically, while Consulting revenues were resilient, growing 3% organically.

Revenues in LHH was 2% lower (5% reported) in the fourth quarter. By LHH segment Recruitment Solutions revenue was 18% lower in highly challenging market conditions, particularly in the US, and across both permanent and flexible professional placement. Performance in Career Transition & Mobility was excellent, led by the US, UK, and Australia, with continued market share gains driving revenue growth of 46%. Learning & Development revenue was 17% lower, with General Assembly and Talent Development challenged by continued headwinds in their end-markets. Ezra was strong, with revenue up 54%. In Pontoon & Other, revenues in Pontoon was 2% higher, weighed by the tech sector downturn.

Revenue by service line

For the full year period, the Adecco Group reported revenue of €23.95 billion, up 3% on an organic and trading days adjusted basis. The group said this was achieved in the context of a slowing macroeconomic backdrop and a sharp downturn in tech sector activity. Management successfully prioritised ways to grow market share, and the group’s revenue growth was well ahead of key competitors every quarter, it added.

Machuel said, “Throughout 2023 we made encouraging progress against our Future@Work Reloaded plan to bring the group to its full potential. We are simplifying the organisation and are on track to deliver on our €150 million G&A savings run-rate target by mid-year. Execution has improved through greater local empowerment and performance management rigour, and we are growing market share – while maintaining the proper balance between top and bottom line.”

“We are harnessing technology to drive efficiencies and competitive edge, reinvigorating our winning culture, and remain laser focused on creating further value for our stakeholders” Machuel said.

In its outlook, the company said its volumes, year-to-date, are marginally below Q4 2023 levels. The group expects to continue to capture market share in a challenging macroeconomic environment in Q1 2024, while managing resources with agility, focusing on productivity and G&A savings.

In Q1 2024, the group anticipates a similar year-on-year development in gross margin and underlying SG&A expenses as in the Q4 23 period.

Earlier this month, Adecco pledged to find jobs for 85,000 refugees globally, and train or upskill 17,000 by the end of 2027.

Adecco Group shares last traded at CHF 36.15 (€37.94), down 3.26% on the day and 14.40% below its 52-week high of CHF 42.23 (€44.32), set on 19 December 2023. The company has a market cap of CHF 6.29 billion (€6.60 billion).