Adecco (ADEN: VX), the world’s largest staffing firm, reported revenue of €5.87 billion for the fourth quarter ending 31 December 2016, an increase of 5% organically compared with €5.67 billion in Q4 2015.

The company reported that growth in the fourth quarter was driven by France, Italy, and Germany, Austria, Switzerland.

Adecco revenue growth in the fourth quarter was up 5% on an organic basis (6% trading days adjusted). The company reported the fourth quarter growth was driven by Europe, especially in France and Italy.

During Q4 2016, gross margin declined to 18.8% from 19.2% last year. The decrease was driven by a decline in temporary staffing gross margin. 

By business line, revenues grew organically by 6% in General Staffing and by 1% in Professional Staffing. Permanent placement revenues were €105 million, up 1% organically. Revenues from career transition totalled €95 million, up 4% organically compared to the prior year.

“In Q4 2016, revenue growth was 6% (trading days adjusted), an improvement compared to 3–4% growth achieved in the previous three quarters, all organically and trading days adjusted. Positive momentum continued into January and February 2017, with a growth rate of 4–5%, organically and trading days adjusted,” Alain Dehaze, Group Chief Executive Officer, said.”

Revenue by Segment for the fourth quarter was as follows:

In France, which accounts for 22% of the group’s revenue, revenue in the fourth quarter was up by 7% on an organic basis. Revenue increased by 7% in General Staffing, which accounts for over 90% of revenues, and grew by 14% in Professional Staffing. Permanent placement revenue in France was up 4%.

In North America, which accounts for 21% of group revenue, revenue for the fourth quarter was down 1% organically. General Staffing accounted for approximately half of revenues and was flat. Revenue was flat in Industrial and decreased by 1% in Office. In Professional Staffing, revenue declined by 1%, with growth of 14% in Medical & Science and declines of 4% in IT, 2% in Engineering & Technical, and 3% in Finance & Legal, compared to the previous year. Permanent placement revenue in North America declined by 1%, compared to last year.

In the UK & Ireland, revenue was up 3% on an organic basis. Revenue in Professional Staffing declined by 5%, with declines of 3% in IT and 19% in Finance & Legal. In General Staffing, revenue increased by 14%. Permanent placement revenue in the UK & Ireland were down 15%.

“In the UK, we see companies waiting to make decisions on new hiring, as they expect (Brexit) Article 50 to be triggered in the coming months,” Dehaze told Reuters. “They want to have more clarity about the future."

In Germany and Austria, revenue was flat, in Switzerland revenue grew by 1%, organically. In Benelux and Nordics, revenue increase by 3% on an organic basis. In the Nordics, revenue was up 9% organically, led by growth in Sweden and Norway. Revenue in Benelux was down 1%.

In Italy, revenue was up 20% on an organic basis. The country made up 7% of group revenue. In Japan, revenue was flat while in Iberia, revenue was up 8% organically.

In Rest of World, revenue grew by 10% on an organic basis. Revenue growth was 5% in Australia & New Zealand, 9% in Latin America, 13% in Eastern Europe & MENA, 11% in Asia, and 10% in India, on an organic basis.

Adecco announced that from 1 April 2017, the company’s operations in North America and UK & Ireland will be combined and managed according to the business lines General Staffing (GS) and Professional Staffing (PS). In each of these regions, the group has substantial operations in both GS and PS. The company states that this move will allow them to drive further commercial and operational focus in these markets through their dedicated GS and PS brands.

Reporting of segment performance will be aligned to the new management structure as from the Q1 2017 results, which will be released on 9 May 2017.

The company also announced that from 1 April 2017, Federico Vione will be appointed Regional Head of North America, UK & Ireland General Staffing (Adecco, Pontoon) and John Marshall is to be appointed Regional Head of North America, UK & Ireland Professional Staffing. Bob Crouch, currently Regional Head of North America, has decided to leave The Adecco Group to pursue his career outside the company.

“Federico and John are passionate leaders with great experience in general staffing and professional staffing, respectively,” Dehaze said. “The specialisation of our management and organisation in North America and UK & Ireland will drive further success in these important regions. I would like to thank Bob for his commitment to The Adecco Group and wish him all the very best for his personal and professional future.”

The company also published full year results as follows:

“In Q4 and FY 2016, The Adecco Group delivered a solid performance, thanks to our more than 33,000 colleagues and over 700,000 associates around the world,” Dehaze said.

“Emerging on the horizon is a new world of work. It brings exciting opportunities for The Adecco Group. Our approach to capture these opportunities is to perform, transform, and innovate. With perform, we are strengthening our current operations and reinforcing our competitive position. With transform, we are enhancing the solutions and experience that we provide to our clients, candidates, associates and colleagues. And with innovate, we are developing and acquiring new approaches and capabilities to capture the emerging opportunities in the changing world of work. This strategic agenda will allow us to drive revenue growth, expand our operating margin, and generate strong cash flow, consistent with our through-the-cycle financial objectives,” Dehaze said.

 “We are pursuing this agenda within the context of our ongoing commitment to invest in the business and return excess capital to shareholders. At the AGM 2017, the Board of Directors will propose a dividend of CHF 2.40 (EUR 2.25) to shareholders, a 50% payout of 2016 adjusted earnings per share. Given our strong financial position, the Board has also decided to initiate a share buyback programme of up to €300 million,” Dehaze said.

“We recognise that the global economic outlook remains uncertain and will adapt to any changes in market conditions, maintaining price discipline and tight cost control,” Dehaze said.

As of last trade, Adecco traded CHF 70.05 (EUR 65.80), down 3.5% on the day. Based on its current share price the company has a market value of CHF 12.2 billion (EUR 11.4 billion).