Revenues up 6% at year-end 2017 for Adecco
The Adecco Group has released its results for the full year 2017.
Revenue growth accelerated to 6% (up to 23,660m euros), organically and trading days adjusted, up from 4% in 2016.
Gross profit for the year was 4,346m euros, up 2 % (4% organic). Gross margin declined by 40 bps, due to price and mix impacts. Good cost control and operating leverage offset the majority of this impact, with EBITA margin excluding one-offs down 10 bps to 4.9%. This included investments in the Group’s strategic initiatives, which had a negative impact of approximately 25 bps.
Markets with especially strong performances in 2017 included: Italy, which grew ahead of the market with continued strong margins; Iberia with growth of 11% trading days adjusted and EBITA margin improvement of 90 bps; and the Netherlands, Sweden and Norway, which achieved double-digit revenue growth. In Australia & New Zealand, its performance improvement plan delivered a turnaround in revenue growth and profitability.
Revenue growth accelerated to 7% in Q4 2017 (up to 6,057m euros), organically and trading days adjusted, up from 5% organically and 6% trading days adjusted in Q3 2017. The improvement was driven in particular by France, Italy and North America, UK & Ireland Professional Staffing.
Gross profit for the fourth quarter was 1,086m euros down 2%, but up 2% organically. Gross margin declined by 90 bps compared to Q4 2016, due mainly to a decline in the temporary staffing gross margin of 70 bps organically, impacted by the unfavourable timing of bank holidays in Germany and the year-on-year impact of accruals. The underlying decline in temporary staffing gross margin in Q4 was approximately 30 bps, similar to the first nine months, driven by price and mix effects.
The EBITA margin excluding oneoffs decreased by 50 bps compared to the prior year, as the gross margin decline and strategic investments more than offset good headcount and SG&A leverage.
Alain Dehaze (pictured), group chief executive officer, commented, “The Adecco Group had another solid year in 2017, with a good financial performance and significant progress made in our strategic agenda to Perform, Transform and Innovate. Organic revenue growth improved, accelerating to 7% in Q4. We maintained our focus on cost and price discipline. And we made significant investments in the new IT infrastructure and digital solutions that underpin our strategy and financial commitments. We also returned almost EUR 650 million to our shareholders, reiterating our commitment to disciplined capital allocation and leading total shareholder returns.
“At our 2017 Capital Markets Day, we described how our industry is evolving, shaped by megatrends, and outlined how we will capitalize on these trends. Demand for our core services will continue to grow. At the same time, digitization, big data and analytics create opportunities to develop new business models, improve customer experience and access new client segments. Underpinned by these trends, the Group is committed to accelerating its structural organic revenue growth, achieving sustained EBITA margin improvement and continuing to deliver strong free cash flow.
“The transformation of the Group, through GrowTogether, began in earnest during 2017. New integrated front office tools began to be rolled out, improving speed and quality of service, and boosting productivity. Client and candidate portals are also being introduced, taking delivery ‘beyond-the-branch’, to increase engagement and drive differentiation.
“We are also innovating with digital ventures that add new revenue streams in attractive adjacent markets. In 2017, we launched Adia and YOSS, both innovative digital solutions, co-created with leaders in technology. And in early 2018, we announced the acquisition of Vettery, a digital professional recruitment platform, expanding our portfolio of digital services and adding valuable talent and technology to the Adecco Group. Vettery will provide a platform to grow our share of the EUR 25bn professional permanent recruitment market, which currently comprises c.1% of revenues.
“The progress achieved in 2017 is a result of the passion, commitment and loyalty of our 34,000 colleagues. I sincerely thank them for their achievement and I look forward to another year of progress in 2018.”