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Adecco Group gross profit up 5% organically in Q2 2016

The Adecco Group has announced its results for Q2 2016.

Revenues were EUR 5.7 billion, up 4% organically compared to the prior year. Gross profit was up 5% and EBITA excluding one-offs was up 6%, both organically. The EBITA margin excluding one-offs was 5.0%, up 10 bps. Net income attributable to Adecco shareholders was up 7% to EUR 190 million and basic EPS was up 9% to EUR 1.11.  

Q2 2016 revenues of EUR 5,696m were up 2% year-on-year on a reported basis. Organically, revenues increased by 4%, or by 3% adjusted for trading days. Currency fluctuations had a negative impact on revenues of approximately 3% and acquisitions had a small positive impact. By business line, revenues grew organically by 4% in general staffing and by 5% in professional staffing. Permanent placement revenues were EUR 121m, up 9% organically. Revenues from career transition totalled EUR 95m, up 1% organically compared to the prior year. 

Gross profit amounted to EUR 1,071m, up 3% or up 5% organically. The gross margin was 18.8%, up 10 bps compared to Q2 2015. Acquisitions had a 10 bps positive impact. On an organic basis, the gross margin was flat. Temporary staffing gross margin was flat, while permanent placement and outplacement each had a neutral impact on gross margin compared to the prior year. The timing of bank holidays in 2016 compared to 2015 positively impacted gross margins in Q2 2016 in countries such as Germany, where associates are fully employed by the Adecco Group.  

Selling, General and Administrative Expenses (SG&A) was EUR 789m. SG&A excluding one-offs was EUR 787m, up 4% organically compared to Q2 2015. In Q2 2016, one-offs comprised EUR 2m integration costs in Lee Hecht Harrison related to the acquired Penna business. In Q2 2015, one-offs comprised EUR 5m integration costs in Lee Hecht Harrison related to the acquired Knightsbridge business and EUR 10m costs for contractual obligations to the former CEO and CFO. FTE employees increased by 3% organically year-on-year. Compared to Q2 2015, the branch network was flat organically. Sequentially, SG&A was up 1% organically and excluding one-offs.  

EBITA was EUR 282m. EBITA excluding one-offs was EUR 284m, up 6% organically. The EBITA margin excluding one-offs was 5.0%, up 10 bps compared to Q2 2015. Amortisation of intangible assets was EUR 9m compared to EUR 10m in Q2 2015. Operating income was EUR 273m compared to EUR 247m in the same period last year.  

In the UK & Ireland, revenues were EUR 571m, up 6% or up 3% adjusted for trading days. Approximately two thirds of revenues come from professional staffing, which returned to growth with an increase of 4%. Revenues grew by 6% in IT, partially offset by a 3% decline in finance & legal. In general staffing, revenues increased by 9%. Permanent placement revenues in the UK & Ireland were up 5%. EBITA was EUR 12m and the EBITA margin was 2.1% compared to 2.4% in Q2 2015.

Alain Dehaze (pictured), CEO of the Adecco Group, said, “I would like to thank our colleagues and associates at the Adecco Group for delivering a solid performance in Q2 2016. On an organic basis, revenues were up 4%, or up 3% adjusted for trading days. We maintained our price discipline, costs remained under control, and we generated strong cash flow from operating activities. We are making progress in implementing our strategy and strengthening our portfolio, positioning us to drive strong performance across our business. With our global leadership in workforce solutions, we are very well placed to support our clients with the flexible solutions they need to succeed in this volatile environment.”

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