The Adecco Group (ADEN:VTX), reported revenue today of €5.71 billion during the first quarter ended 31 March 2024, flat year-on-year on an organically and trading days adjusted (TDA) basis and down 1% at constant currency.

At the global business unit (GBU) level, organically and TDA, Adecco revenue was up 1% (, Akkodis revenue was 2% lower, and LHH revenue was 5% lower.

Denis Machuel, Adecco Group CEO, said in a press release, “The group demonstrated strong operational progress in the first quarter. We achieved revenue stability and maintained firm pricing discipline amidst challenging market conditions while driving further cost improvement across the business. Adecco delivered significant market share gains with a healthy gross margin.”

Machuel continued, “Akkodis faced ongoing tech staffing headwinds while achieving solid growth in its higher-value consulting business, which lifted overall profitability. In LHH, Career Transition and Ezra once again outperformed, and the business delivered an improved margin.”

Adecco Group said comparative figures are restated to reflect the group's change in accounting principle concerning the allocation of certain employee and client programme costs between selling, general and administrative expenses and direct costs of services.

Gross margin, at 19.8%, was up 20 basis points sequentially and 100 basis points lower year-on-year, mainly reflecting current business mix and firm pricing. Currency effects had no impact.

SG&A expenses excluding one-offs were €978 million, 6% lower organically (7% reported).

EBITA excluding one-offs was €157 million, 12% below the prior year period on an organic basis. The FESCO JV (joint venture) contributed €5 million income, from €16 million in the previous year period. The EBITA margin, excluding one-offs, was 2.8%, 30 basis points lower, or 10 basis points when excluding the impact from the timing of FESCO JV income.

The net income attributable to Adecco Group shareholders was €73 million, which was 20% lower year-on-year, mainly reflecting lower operating income. According to Reuters (paywall), net income beat analysts’ expectations at €59 million.

Last month, staffing rival Randstad, the world’s largest staffing firm, reported Q1 revenue of €5.94 billion with organic revenue per working day down 7.8% over the year.

Revenue by global business unit

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.

Revenue in Adecco was 1% higher, amid challenging markets. Revenue growth was strong in APAC, Southern Europe & EEMENA (Eastern Europe, Middle East and North Africa) and DACH (Germany, Austria, Switzerland). Northern Europe and France were weak, while the Americas were broadly stable.

In Adecco France, revenue was 7% lower, reflecting a challenging trading backdrop, with notable weakness in manufacturing, logistics, chemicals, and retail. Growth in consulting was a highlight.

In Adecco Northern Europe, revenue was 2% lower in UK & Ireland, 1% lower in Belux (Belgium, Luxembourg), and 12% lower in the Nordics, reflecting a tough market and regulatory change in Norway. The region performed well compared to competitors. In sector terms, financial services were weak, while manufacturing was soft.

Across Adecco DACH, revenue in Germany was up 8%, strongly outperforming the market and supported by strength in logistics, autos, and professional services. In Switzerland & Austria, revenue was up 4%.

In Southern Europe and EEMENA, revenue growth was strong, with Italy up 2%, Iberia up 17% and EEMENA up 13%. The company claimed that all segments gained market share. In sector terms, logistics, autos, and food & beverages performed well.

Within Adecco Americas, Latin America revenue grew 25%, led by Colombia and Brazil. Retail, metals & mining, and logistics were strong. In North America, revenue was 12% lower in a subdued market. On a sector basis, IT tech and autos were weak, while manufacturing and logistics were soft.

In Adecco APAC, revenue growth was strong, up 14%. Japan was up 10%, Asia up 4%, and India up 12%. In Australia & New Zealand, revenue was 57% higher, boosted by a significant government contract. Retail, IT Tech, and Defence sectors advanced strongly.

Akkodis’ revenue was 2% lower (6% reported), challenged by the tough tech staffing market. Staffing revenues were 20% lower organically. However, Consulting & Solutions revenue grew 5% organically.

Revenue in LHH was 5% lower (6% reported) in the first quarter. By segment: Market conditions remained challenging for Recruitment Solutions, and revenue was 16% lower. Performance in Career Transition & Mobility was strong against a demanding comparison period, with revenue up 9%.

In LHH, Learning & Development revenue was 10% lower organically, with General Assembly and Talent Development challenged in their end-markets. Ezra saw revenue grow by 64% organically and exiting the quarter with a substantial pipeline. In Pontoon, revenues was 8% higher, led by growth in Direct Sourcing. The tech sector downturn continued to challenge MSP/RPO activities.

Last week, it was reported that Hired, a hiring platform that was acquired by the Adecco Group in 2020, will be incorporated into the company’s LHH Recruitment Solutions.

“LHH, a global business unit of the Adecco Group, has decided to incorporate Hired into LHH Recruitment Solutions effective June 14,” LHH said in a statement to SIA last week. “This strategic decision simplifies LHH’s support for in-house recruitment teams and candidates. Additionally, it expands customers’ access to a wider range of industries and to LHH’s comprehensive solutions offering, including outplacement, career mobility, leadership development, upskilling and executive career advisory.”

Revenue by service line

Machuel said, “We remain laser-focused on the elements within our control – competitive outperformance and market share expansion, together with cost discipline. The G&A savings programme is on track, and at the same time, the group is preserving resources, where appropriate, to ensure it can swiftly capitalise on the future market rebound.”

Adecco Group said in its second quarter to date, volumes have been stable when compared to Q1 2024 levels. However, revenue developments in Q2 2024 are expected to reflect a slightly tougher comparison period than in Q1 2024.

The group anticipates continued market share gain in a challenging macroeconomic environment while managing resources with agility, focusing on productivity and G&A savings.

In Q2 2024, the group expects its gross margin to be broadly in line with Q1 24 levels. SG&A expenses, excluding one-offs, as a percentage of revenues are expected to improve modestly versus Q1 24, despite seasonality.

Adecco Group shares last traded at €31.70, down 1.67% on the day and 16.97% above the 52 week low of €27.10 set on 31 May 2023. The company has a market cap of €5.44 billion.