The Adecco Group (ADEN:VTX), reported revenue of €5.89 billion in the third quarter ended 30 September 2019, a decrease of 4% organically and trading days adjusted. The decrease reflected ongoing challenging market conditions in Europe and the US.

The third quarter results follow a 3% decline (adjusted for trading days) in Q2.

Currency movements had a positive impact on revenue of approximately 1% while the number of working days had an impact of approximately 1.5% leaving a revenue decline of 4% on an organic and trading days adjusted basis.

Adecco said the rate of revenue stabilised in most European countries with the exception of France and the UK where staffing markets slowed.

Rival staffing giants Randstad and ManpowerGroup both cited difficult conditions due to global uncertainty in their respective third quarter results.

By service line, temporary staffing revenue declined by 4% while permanent placement revenue was flat. Revenue from career transition was up 5% while revenue in outsourcing and other activities was up 6%. General Staffing revenue was down 4%, Professional Staffing was flat and Solutions revenue was up 9%. All on an organic basis.

Third-quarter net profit fell to €179 million. According to Reuters, this beat analyst forecasts €169 million. The 34% drop reflected a tough comparison with the €110 million gain it made last year from selling its Beeline software staffing company.

The group said the decline in net income was primarily attributable to the gain on sale reflected in the prior year period.

Alain Dehaze, Group Chief Executive Officer said the group “delivered a solid performance in an uncertain external environment.”

“We remain focused on our business transformation and continue to invest in our strategic priorities – GrowTogether, IT and our digital ventures – which are fundamentally strengthening our business,” Dehaze said.

The Adecco Group also announced today that it entered into a definitive agreement to sell its US healthcare staffing business, Soliant Health, for a cash consideration of USD 612 million (€551 million), to Olympus Partners.

The sale is part of the Adecco Group’s strategy to concentrate on globally scalable brands and digital solutions.

Dehaze said, “Soliant is an excellent business but with limited scope to expand outside of the US market, which has unique healthcare market dynamics. In line with the group strategy to focus on globally scalable brands and digital solutions, this divestment is an attractive way to unlock value for our shareholders.”

David Alexander, head of Soliant Health, commented, “Soliant is a strong business that has thrived inside of the Adecco Group and we are pleased to have reached an agreement that we believe will unlock value for both the Group, and Soliant. As we look to this next chapter in our story we see strong potential for growth as a standalone company by building on our unique strengths. We are committed to business continuity through this transition period, and to the continued success of our valued customers, healthcare professionals and employees.”

In the 12 months ending 30 June 2019, Soliant generated revenues of USD 344 million (EUR 302 million) and EBITDA of approximately USD 54 million (EUR 47 million). The divestment is expected to result in a gain on sale for the Adecco Group to be recognised upon closing and is expected to be complete by Q1 2020.

Revenue by geography

Revenue by business line

Adecco said revenue in September and October combined was down 4% organically and trading days adjusted.

The group said it expects to deliver the targeted incremental GrowTogether productivity savings of €70 million in 2019 and is on track to deliver the targeted €250 million total savings in 2020.

“As we look to the fourth quarter, we are continuing to build the next layer of the GrowTogether programme, with a focus on digital tools and solutions that deliver greater value to our clients and candidates,” Dehaze said.

As of last trade the Adecco Group traded at CHF 58.74 (€53.30), down 0.78% on the day and 2.26% below its 52-week high of CHF 60.10 (€54.54), set on 18 April 2019. Based on its current share price the company has a market value of CHF 9.66 billion (€8.76 billion).