Adecco (ADEN: VX), the world’s largest staffing firm, reported revenue of €5.97 billion for the second quarter ending 30 June 2017, an increase of 5% organically compared with €5.69 billion in Q4 2015. However, both revenue and profit just missed financial analyst expectations for the quarter.

Revenue growth was driven in particular by France, Italy, Iberia and Benelux. Organic revenue growth was broad-based across service lines: temporary staffing revenues increased by 4% to €5,217 million; permanent placement revenues were up 9% to EUR 132 million; revenues from career transition totalled €97 million, down 2%; and revenues in outsourcing and other activities grew by 9% compared to the prior year. By business line, revenues grew 6% in General Staffing, were flat in Professional Staffing, and increased by 2% in Solutions, all on an organic basis.

Gross margin was negatively impacted by the timing of bank holidays. The underlying decline in temporary staffing gross margin in Q2 was approximately 20 bps, driven by price and mix effects. Net Income stood at €192, up from €190 million the year before.

“In Q2 2017, we made further progress on our strategic agenda of Perform, Transform, and Innovate, thanks to the engagement of our more than 33,000 colleagues,” Alain Dehaze, Group CEO said. “Our performance continued: revenue growth was robust, driven in particular by strength in France, Italy, Iberia and Benelux.”

“We maintained our focus on productivity, with an increase of only 1% in FTE (Full-time equivalent) employees to deliver 6% underlying revenue growth, and cash conversion was again strong,” Dehaze said. “Alongside driving our performance, we are continuing to transform and innovate to capture the opportunities we see in our markets. Implementation of our segmentation strategy is driving strong growth with small- and medium- sized clients and with our onsite delivery model for large clients.”

“We are investing in IT infrastructure and Digital innovation: we signed a new global partnership agreement with Mya Systems, a leading AI player in HR tech; we launched our digital Active Placement model in Lee Hecht Harrison; and we commenced the rollout in the UK of Adia, our end-to-end online staffing platform,” Dehaze said.

Revenue by Segment for the second quarter was as follows:

In France, revenues increased by 9% in General Staffing, which accounts for over 90% of revenues, and declined by 2% in Professional Staffing. Revenue growth was broad based and continued to be strong in logistics, construction and automotive. Permanent placement revenues in France were up 13%.

North America General Staffing was down 4%. UK & Ireland General Staffing was up 8%, with strong growth in retail and in local government. Permanent placement revenues increased by 13% in North America General Staffing but declined by 11% in UK & Ireland General Staffing. Chief Financial Officer Hans Ploos van Amstel told Reuters this morning that he saw a divergence between Europe and Britain, where financial companies were holding off recruiting new staff. CEO Dehaze said he thought the British hiring market would continue to be uncertain until more details of Brexit were worked out.

North America Professional Staffing was up 2%. Growth was modest in Medical & Science, Engineering & Technical and IT, while revenues were flat in Finance & Legal. UK & Ireland Professional Staffing represents approximately 35% of revenues and was down 6%, driven by declines in IT and Finance & Legal. Permanent placement revenues increased by 9% in North America Professional Staffing and declined by 23% in UK & Ireland Professional Staffing.

In Germany & Austria, revenues were down 5% while Switzerland was down 1%.

In the Nordics, revenues were up 2% led by strong growth in Sweden and good growth in Norway. Revenues in Benelux were up 10%. Growth in Belgium continued to be broad-based, and the Netherlands achieved double-digit revenue growth thanks to a strong sequential development and the weak prior year base.

In Italy, growth was broad-based across service lines, including temporary staffing, permanent placement, outsourcing and training. Japan showed good growth in professional staffing and in permanent placement, while Iberia also showed growth.

In the Rest of World region, revenue growth was 4% in Australia & New Zealand, 9% in Latin America, 4% in Eastern Europe & MENA, 10% in Asia, and 4% in India.

In Lee Hecht Harrison, organically, revenues declined by 3%, with low to mid-single digit declines in the group’s largest markets of the US, France, Canada and UK.

Revenue by business line was broken down as follows:

Earlier this year the group announced that it would be launching Adia, an end-to-end online staffing model. The group first launched in Switzerland and, in the coming quarters, will commence a multi-country rollout starting with the UK. Staffing Industry Analysts categorizes this hi-tech/low touch staffing model as ‘Just-in-Time Staffing’. Those interested in this business model should check out our reports ‘Just-in-Time Staffing: Thinning the Line Between the Human Cloud and Staffing’ and the recently published ‘Introduction to Online Staffing Enabling Technologies’.

Adecco also provided an update for its global partnership agreement with Mya Systems.. Mya is an AI-enabled chatbot that automates the outreach, screening, and communications with jobseekers. “With this global partnership, Mya Systems’ tools will be integrated into the Adecco Group’s solutions and jointly marketed to potential new customers and existing Adecco Group clients,” the group stated.

The group also provided an update on the launch of a digital ‘Active Placement’ model for career transition. Lee Hecht Harrison’s Active Placement model uses people and technology to extend the scope and increase the effectiveness of traditional career transition. “Early results show significant reductions in time to placement and high satisfaction scores from candidates and talent acquisition professionals,” the group stated.

In its management outlook, Adecco stated, “In Q2 2017, revenue growth was 6%, a continuation of the 6% growth achieved in Q1 2017, organically and trading days adjusted. Positive momentum continued in June 2017, with a growth rate of 6%, organically and trading days adjusted, and volume growth in July was similar to June.”

Adecco also announced the appointment of the group’s new Head of Investor Relations, Nicholas de la Grense. The appointment will take effect from September 2017. He will report to the Group’s Chief Financial Officer, Hans Ploos van Amstel. Nick joins from Bank of America Merrill Lynch, where he was most recently Head of the European Business Services team and lead analyst covering the Adecco Group.

As of last trade Adecco Group AG traded at €70.05, down 5.53% on the day and 10.08% below its 52-week high of €77.90, set on 11 May 2017. Based on its current share price the company has a market value of €12.56 billion.