The Adecco Group (ADEN:VTX) today reported revenue of €6.13 billion in the fourth quarter ended 31 December 2018. Revenue fell 1% on an organic and trading-days adjusted basis.

The group’s fourth-quarter was a slowdown from the 2% growth (trading days adjusted) reported in Q3 2018 and also down from 4% in Q2 2018. The continuing deceleration across Europe continued, driven in particular by France, Germany and Italy.

Earlier this year, rival Randstad reported flat revenue growth while ManpowerGroup reported weakening revenue growth during their fourth quarter.

Currency movements had a negligible impact on revenues while M&A had a positive impact of approximately 0.5%.

Temporary staffing revenue during the fourth quarter were flat at €5.31 billion; permanent placement revenues rose 18% to €140 million. Revenue from career transition stood at €80 million, down 6%; and revenue in outsourcing and other activities grew by 6% compared to the prior year, all on an organic basis. By business line, revenue was flat in General Staffing, up 1% in Professional Staffing, and up 3% in Solutions, all on an organic basis.

Operating loss was €51 million, due to the goodwill impairment of €270 million, related to the Germany, Austria, Switzerland reporting segment. For comparison, in Q4 2017, operating income was €265 million.

The Adecco Group said net loss for the period was €112 million compared with a profit of €297 million the year previous.

Analysts in an Infront Data poll had expected a net profit of €150 million.

“The group ended the year with a strong performance, despite an increasingly challenging market backdrop in Europe,” Group CEO Alain Dehaze said.

“While revenue declined by 1% (trading days adjusted), we outperformed in a number of key regions, including France, US General Staffing and Italy,” Dehaze said. “Underlying profitability also further improved in Q4 2018, building on the positive trend of the prior quarter. Investments in our ‘Perform, Transform, Innovate’ strategy, which have impacted margins in 2017 and 2018, are now delivering the first financial results, in addition to laying strong foundations for future profitable growth.”

Revenue by geography was broken down as follows.

Growth as described below is on an organic basis unless otherwise noted.

In France, the slowdown in revenue growth was broad-based by industry sector. Permanent placement revenues were up 22% on an organic basis.

North America General Staffing was up 8%, or 6% trading days adjusted, driven by client wins and strong seasonal demand.

UK & Ireland General Staffing revenue was up 1%, but down 1% trading days adjusted, reflecting generally soft market conditions.

Meanwhile, permanent placement revenue was up 12% in North America General Staffing and were flat in UK & Ireland General Staffing.

North America Professional Staffing was down 2%, or 4% trading days adjusted. Growth in Finance & Legal and Medical & Science was offset by declines in IT and Engineering & Technical.

UK & Ireland Professional Staffing revenue rose 3%, or 2% trading days adjusted, driven by growth in Engineering & Technical. Permanent placement revenue increased by 31% in North America Professional Staffing and by 13% in UK & Ireland Professional Staffing.

In Germany & Austria, revenue was down 10%, or 13% trading days adjusted, driven by a further slowdown in the market and the consolidation of the Adecco and Tuja general staffing businesses. Regulatory changes that applied from 1 October 2018, and which limit the maximum duration of assignments, had a greater-than-expected impact on growth and negatively impacted margins. In Switzerland, revenue grew by 8% or by 6% trading days adjusted.

In the Nordics, revenue was flat with growth in Norway offsetting a decline in Sweden. Revenue in Benelux was down 9%, or down 11% trading days adjusted. Belgium experienced a high-single-digit revenue decline, while the Netherlands declined double-digits, due to softer market conditions and reduced demand at a few large clients.

In Italy, permanent placement revenue increased by 17%.

Japan reported revenue growth as well as growth in professional staffing and permanent placement.

Revenue grew 13% in Australia & New Zealand, 5% in Latin America and was flat in Eastern Europe & MENA, while declining by 4% in Asia, and by 14% in India, all trading days adjusted.

In Career Transition and Talent Development (including Lee Hecht Harrison and General Assembly), revenue was down 1%, to €124 million. Adecco stated that this reflects the counter-cyclical nature of the Career Transition business and high proportion of revenues coming from North America, where the economy remains strong.

Revenue by business line was broken down as follows.

The Adecco Group also announced a number of changes to its executive committee today.

Mark De Smedt, Regional Head of Northern Europe, announced that he will leave The Adecco Group at the end of March 2019. As of 1 April 2019, Christophe Catoir, regional head of France, will assume additional regional responsibility for the Northern Europe region, which encompasses the Benelux & Nordics and Germany, Austria, Switzerland reporting segments.

The Adecco Group also published full year results as follows.

Looking ahead, in Q1 2019, revenue in January declined by 2% year-on-year, organically and trading days adjusted, and volume trends in February slightly decelerated. The slowdown continues to be driven by European markets, and is partly a reflection of challenging year-on-year comparables, following strong growth in the same period of the prior year, particularly in France and Southern Europe.

 As of last trade, Adecco Group traded at €50.58 (€44.59), down 5.63% on the day and 19.21% above the 52 week low of CHF 42.43 (€37.41) set on 3 January 2019. Based on its current share price the company has a market value of CHF 8.93 billion (€7.87 billion).