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Adecco gross profit up 4% organically in Q2

"The economic environment continued to improve in most of Europe. Revenues in France and Germany returned to growth and we saw a further acceleration in Benelux and Italy, while Iberia and Eastern Europe again achieved double-digit growth. The improvement in Europe was partly offset by a moderation in growth in North America. In July, revenue growth for the Group was similar to the second quarter, organically and adjusted for trading days. We are committed to achieving our EBITA margin target of above 5.5% in 2015, which is dependent on an acceleration of revenue growth in the second half of the year. Given the trends in our business and the current economic outlook, and helped by an easier comparison base, we continue to expect such a pick-up. Based on this positive outlook, we remain convinced we will achieve our target.”

Revenues

Q2 2015 revenues of EUR 5.6 billion were up 12% year-on-year, or up 4% in constant currency and also organically. Currency fluctuations had a positive impact on revenues of approximately 8%. By business line, revenues in constant currency grew by 6% in General Staffing, with Industrial up 6% and Office up 4%, and declined by 2% in Professional Staffing. Permanent placement revenues amounted to EUR 114 million, up 13% organically. Revenues from Career Transition (outplacement) totalled EUR 93 million, up 5% organically.

Gross Profit

Gross profit amounted to EUR 1,041 million, up 15% or 4% organically. The gross margin was 18.7%, up 60 bps. Currency effects accounted for 30 bps of the increase, acquisitions had a positive effect of 20 bps and the organic increase was 10 bps. On an organic basis, temporary staffing had a 5 bps negative impact on the gross margin development, while permanent placement added 15 bps.

Selling, General and Administrative Expenses (SG&A)

SG&A was EUR 784 million. SG&A excluding one-offs was EUR 769 million, up 2% organically compared to Q2 2014. In Q2 2015, one-offs comprised EUR 5 million integration costs in LHH related to the acquired Knightsbridge business and EUR 10 million costs for contractual obligations related to the change of CEO and CFO. In Q2 2014, one-offs comprised EUR 4 million restructuring costs for the move to a single headquarters in North America. Sequentially, SG&A excluding one-offs was up 1% on an organic basis. Compared to Q2 2014, FTE employees increased by 1% organically and the branch network increased by 1%.

EBITA
EBITA was EUR 257 million. EBITA excluding one-offs was EUR 272 million, up 10% in constant currency. The EBITA margin excluding one-offs was 4.9%, up 30 bps compared to Q2 2014

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