Adecco (ADEN: VX), the largest staffing firm in the world, today reported revenue for the first quarter ending 31 March 2016 of €5.1 billion, an increase of 4% in constant currency (CC) compared with the same period last year. 

In Q1 2016, organic revenue growth was 4%, a continuation of the single-digit growth seen during 2015. Growth continued to improve slightly in France, remained stable in North America, and moderated in Italy, Iberia and Benelux. In March and April combined, Adecco Group revenue growth was 3% organically and adjusted for trading days.

In March 2016, the company announced that it has reached an agreement to make a recommended cash offer for the entire ordinary share capital of UK recruitment firm Penna Consulting PLC. On 9 May 2016 all closing conditions of the recommended cash offer for all outstanding shares had been fulfilled or waived. The closing of the transaction is expected to occur today, 10 May 2016 following the scheme’s registration with the UK registrar of companies.

Alain Dehaze, CEO of the Adecco Group said: “In the first quarter, our colleagues and associates at the Adecco Group delivered a good performance. Revenues continued the trend of modest growth seen during 2015. Our relative revenue growth compared to our main peers improved and we are back in line with the market growth in France, our largest market. We maintained our price discipline and costs remained under control, with 4% organic revenue growth being supported by a 3% increase in FTE employees. In March and April combined, revenue growth was 3% organically and adjusted for trading days. We remain focused on driving profitable growth across our business, supported by the implementation of our strategic priorities. We are delighted that today we will welcome new colleagues to the Adecco Group following the completion of the acquisition of Penna, which further reinforces our leading global position in career transition, talent development and recruitment solutions.”

SG&A was €783 million, up 4% organically compared to Q1 2015. FTE employees increased by 3% year-on-year and IT costs also increased, reflecting the transition phase to a new IT approach announced last quarter. Compared to Q1 2015, the branch network was also up 1%.

The increase in costs dampened EBITA which, at €228 million, was down 5% organically compared to Q1 2015. The EBITA margin was 4.3%, down 30 bps, due to the timing of bank holidays and higher IT costs in Q1 2016.

A geographical breakdown in revenue for the first quarter was as follows:

In France, which accounted for 21% of the company’s total revenue, revenues increased by 7% in General Staffing, which accounts for over 90% of revenues, and declined by 2% in Professional Staffing. Revenue growth continued in construction, remained very strong in automotive, and accelerated in retail and in logistics. Permanent placement revenues in France were up 31%.

North America accounted for 22% of the company’s total revenues. In North America, General Staffing accounts for approximately half of revenues, and declined by 2%. In Industrial, revenue growth was flat while in Office, revenues declined by 6%. In Professional Staffing, revenues were up 4%, with growth of 29% in Medical & Science, 15% in Finance & Legal and 2% in IT, while Engineering & Technical declined by 10%. Permanent placement revenues in North America were up 9%.

In the UK & Ireland, which accounted for 10% of the company’s revenues, approximately two-thirds of revenues came from Professional Staffing, which declined by 6%. Revenues decreased by 6% in Finance & Legal and by 5% in IT. In General Staffing, revenues increased by 12%. Permanent placement revenues in the UK & Ireland were up 1%.

Germany, Austria and Switzerland accounted for 9% of the company’s total revenue. In Germany & Austria, revenues were flat, as a decline in automotive was offset by growth in sectors such as manufacturing and chemicals. In Switzerland, revenues declined by 8%, negatively impacted by reductions in the export-related and medical sectors.

In Benelux and Nordics, which accounted for 8% of total revenue, revenue was up by 5%. In the Nordics, revenues were down 1%, with continued growth in Sweden and a sequential improvement in Norway.

In Rest of World, which accounted for 12% of total revenue, revenue growth was 4% in Australia & New Zealand, 13% in Latin America, 19% in Eastern Europe & MENA, 8% in Asia and 23% in India.

Revenues in Lee Hecht Harrison, the Adecco Group’s Career Transition and Talent Development business, accounted for 2% of total revenue. Following the acquisition of Knightsbrigdge in Q2 2015, revenue was up 1% organically, or up 11% in constant currency. Good revenue growth in the USA was largely offset by a decline in France, respectively Lee Hecht Harrison’s largest and second-largest businesses by revenues.

Adecco Group operates three primary business lines; General Staffing, Professional Staffing, and Solutions. Each business line also comprises subdivisions. Within the Solutions business the company offers Career Transition & Talent Development services (CTTD), and its Business Process Outsourcing (BPO) includes Adecco’s Managed Service Programmes (MSP) Recruitment Process Outsourcing (RPO), and its Vendor Management System (VMS).

The revenue breakdown by business line and subdivisions in Q1 2016 was a follows:

The company provided little in the way of forward guidance in its results announcement beyond reiterating its financial targets.

In trading today, Adecco SA traded at CHF 59.50 (€53.73), down 3.8% on the day and 12.80% above the 52 week low of CHF 52.75 (€47.63) set on 11 Feb 2016. Based on its current share price, the company has a market value of CHF 10.66 billion (€9.63 billion).