Third-quarter revenue at Adecco, the world’s largest staffing firm, rose 4% on an organic basis and gross margin improved.

However, the company reported a noncash goodwill impairment of €740 million (US$832.0 million) in the third quarter. Adecco took an interim impairment test based on proposed regulatory changes in Germany and a weaker macroeconomic outlook in certain markets. Of the total amount, €648 relates to Germany and Austria, €82 million relates to Australia and New Zealand, and €10 million relates to India.

Overall, revenue growth accelerated in emerging markets and Benelux, and remains strong in Southern Europe, the company reported. In the meantime, revenue growth is modest in large markets in Western Europe, the US and Japan. And conditions in the Nordics and Switzerland remain challenging.

Global permanent placement revenue rose 12% on an organic basis to €113 million (US$127.0 million). Outplacement revenue rose 1% on an organic basis to €80 million (US$90.0 million). Earlier this year, Adecco acquired Knightsbridge, which joined Adecco’s Lee Hecht Harrison outplacement business.

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“Southern Europe, Benelux and Emerging Markets continue to achieve very good revenue growth, while growth remains modest in our large markets in Western Europe, the USA and Japan,” CEO Alain Dehaze said. “As previously stated, reaching our EBITA margin target of above 5.5% in 2015 depended on an acceleration in revenue growth in the second half of the year. In H2 2015, our organic revenue growth continues to be steady but is not accelerating sufficiently to achieve the EBITA margin target. Adecco will still deliver very strong profitability in 2015. With our continued commitment to price discipline, cost leadership, tight capital management and EVA, we remain confident that we have many opportunities for sustainable profitable growth in the coming years.”

Revenue by segment

Revenue by business line

* BPO includes managed services programs (MSP), recruitment process outsourcing (RPO) and vendor management systems (VMS). 

All revenue changes in below country notes are reported on an organic basis, which excludes impact of currency, acquisitions and divestitures.

France

• Revenue rose 1% to €1.26 billion
• Industrial, which accounts for more than 85% of revenue, rose by 3%
• Construction showed signs of sequential stabilization, while growth continued in logistics and automotive
• Permanent placement revenues in France rose 6%

North America

• Revenue rose 1% to €1.2 billion
• General staffing, which accounts for approximately half of revenue, rose by 1%
• Industrial revenue rose 7%, while office revenue fell 8%
• Professional staffing revenue was flat, with growth of 14% in medical and science; 5% in finance and legal; and 3% in IT, while engineering and technical fell 9%
• Permanent placement revenue rose 17%

UK and Ireland

• Revenue was flat at €586 million
• Professional staffing revenue, which accounts for approximately two-thirds of revenue, declined by 1%
• IT revenue was flat
• Finance and legal revenue declined by 1%
• Within general staffing, the majority of revenue is in office, which increased by 4%
• Permanent placement revenue in the UK and Ireland rose 3%

Germany and Austria

• Revenue rose 2% to €449 million
• Office revenue rose up 2% and professional staffing was flat

Japan

• Revenue rose 2% to €275 million
• General staffing revenue, which is mainly exposed to the office business, rose 1%
• Professional staffing revenue, s Adecco’s smaller business comprising IT and engineering and technical, rose 3%

Italy

• Revenue rose 18%

Benelux

• Revenue rose 13%, with double-digit growth in all three countries in the region.

Nordics

• Revenue fell 11%
• Revenue development improved further in Sweden, but continued to deteriorate in Norway, where the market environment continues to be very challenging

Iberia

• Revenue rose 13%

Australia and New Zealand

• Revenue rose 4%

Switzerland

• Revenue fell 3%

Emerging markets

• Revenue rose 16%, with double-digit growth in Latin America, Eastern Europe and MENA, and India