Q2 2019 revenues down 2% for The Adecco Group
The Adecco Group has released its results for the second quarter and first half of 2019.
Q2 2019 revenues were EUR 5,923m, down 2% year-on-year on a reported basis. In the first six months of 2019 revenues of EUR 11,568m were down 2% year-on-year on a reported basis.
Gross profit was EUR 1,128m in Q2 2019, up 2% on a reported basis and down 1% organically. Gross margin was 19.0%, up 70 bps compared to Q2 2018. For the first half of 2019, gross profit amounted to EUR 2,208m up 3%on a reported basis and down 1% organically.
SG&A excluding one-offs was EUR 863 million in Q2 2019, up 3% year-on-year on a reported basis but down 1% organically, supported by GrowTogether and good cost management. SG&A excluding one-offs was EUR 1,717m in the first six months of 2019 down 1% organically compared to the prior year.
EBITA in Q2 2019 was EUR 241m. EBITA excluding one-offs was EUR 265m, down 3% organically. EBITA margin excluding one-offs was 4.5%, flat year-on-year on a reported basis. EBITA excluding one-offs was EUR 491m in the first six months of 2019 up 1% on a reported basis year-on-year and up 2% organically.
Operating income was EUR 228m in Q2 2019, compared to EUR 249m in Q2 2018. Operating income was EUR 435m in the first six months of 2019 compared to EUR 434m in the same period of 2019.
In France, revenues were EUR 1,420m in Q2 2019 , down 3% year on year. Revenues decreased by 4% in General Staffing, which accounts for over 90% of revenues, partly offset by strong growth in Professional Staffing, up 13%.
In North America, UK & Ireland General Staffing, revenues were EUR 735m in the second quarter, a decline of 2%, or 1% trading days adjusted. North America General Staffing, which accounts for approximately 75% of revenues, was down 2%. UK & Ireland General Staffing represents approximately 25% of revenues and was down 1%, or flat trading days adjusted, in a market impacted by Brexit-related uncertainty.
In Germany, Austria, Switzerland, revenues were EUR 474m in Q2 2019, down 16%, or down 15% trading days adjusted. In Germany & Austria, revenues declined 18%, or 17% trading days adjusted, driven primarily by the market slowdown, particularly in the automotive sector, and the ongoing impact of regulatory changes.
In Benelux and Nordics, revenues were EUR 482m, down 8%, or down 7% trading days adjusted. In the Nordics, revenues declined 4%, or 2% trading days adjusted, with growth in Norway offset by a decline in Sweden. Revenues in Benelux were down 10%, or down 11% trading days adjusted.
In Italy, revenues were EUR 497m, down 5%, or down 6% trading days adjusted, due mainly to weakness in manufacturing, automotive and metal sectors. EBITA was EUR 44m and the margin was 8.7%, up 30 bps year-on-year, driven by improvement in pricing and strong growth in permanent placement, which was up 11%.
In Japan, revenues were EUR 364m, up 6%, or up 12% trading days adjusted, with good growth in professional staffing and permanent placement. EBITA was EUR 28m and the EBITA margin was 7.7%, an increase of 30 bps year-on-year driven by business mix and productivity improvements.
In Iberia, revenues were EUR 286m, flat or up 4% trading days adjusted. EBITA was EUR 13m. The EBITA margin declined by 70 bps year-on-year to 4.9%, impacted by lower profitability in outsourcing and discrete costs.
In Rest of World, revenues were EUR 673m, up 1% or up 2% trading days adjusted. Revenues increased 4% in Australia & New Zealand, 1% in Latin America, 6% in Asia, 4% in India and declined by 3% in Eastern Europe & MENA, all trading days adjusted. For the region, EBITA was EUR 24m with a margin of 3.5%, down 10 bps compared to last year’s EBITA margin excluding one-offs.
Alain Dehaze (pictured), group chief executive officer, commented, “The Group’s Q2 2019 results demonstrate further strong execution of our strategy. Despite the external headwinds, we continued to deliver consistent underlying margin expansion and improved productivity. We increased gross margins for the fourth consecutive quarter, supported by a focus on higher value solutions, the roll-out of value-based pricing tools and tighter labour markets.
“Organic revenue growth slowed in the quarter, driven mainly by Europe. This partly reflected robust growth in the same period of the prior year, and also continued weakness in automotive and manufacturing sectors in many European economies. We see the year-on-year comparison base becoming less challenging as the second half progresses, given the slowdown in the European economy in the late summer of 2018.
“GrowTogether supported a further improvement in FTE productivity in Q2 and we remain on track to deliver the targeted incremental savings of EUR 70 million in 2019.
“Increased collaboration between our brands has created new opportunities to deliver improved solutions to our customers, with positive examples in Q2. Integrating General Assembly’s up/reskilling solutions into the Lee Hecht Harrison is enabling new client business. Additionally, we launched the Modis Academy in the US; an innovative solution to address persistent talent shortages in high-demand tech skills.”