Adecco and PageGroup show resilience in latest results
The Adecco Group, the world’s second biggest HR and temporary staffing company, has reported Q2 2020 revenue of EUR 4,181 million, down 29% year-on-year on a reported basis and down 28% on an organic and trading days adjusted basis.
Meanwhile, British recruiter PageGroup reported revenue of £655 million in its
unaudited half year results for the period ended 30 June, down -20.2% from 2019.
The CEOs of both groups credited resilience in their overall business models combined with swift management action and staff support in enabling them to endure the extreme market conditions thrown up by the Covid-19 pandemic.
Alain Dehaze, CEO of Adecco, said the group’s businesses had performed ahead of the market in key countries, including France, Italy, Spain and Japan.
“Throughout the first half the group remained solidly profitable with strong gross margin performance despite the steep revenue declines. This is evidence of the disciplined cost management of our teams and the balanced portfolio we have built in recent years. Cash flow during the quarter was also strong,” he said.
“We see early signs of improvement as lockdowns ease, and we have supported almost 100,000 associates back to work since the April trough. Nevertheless, the recovery is likely to be gradual and potentially volatile, as much uncertainty persists.”
By brand, Workforce Solutions (Adecco brand) revenues declined 30%, Professional Solutions were down 23%, including Modis down 11%, Badenoch + Clark/Spring Professional were down 29% and other professional brands declined 48%; Talent Solutions and Ventures declined 9%.
Gross profit was EUR 786 million in Q2 2020, down 30% on a reported basis and down 28% organically.
At PageGroup, gross profit was £300.7 million, down 30.6% on the comparable 2019 figures, and operating profit was a slim £0.4 million, down 99.5%. The company has suspended its dividend policy with the intention of reinstating returns as conditions improve.
CEO Steve Ingham said 450 of the company’s most senior employees, including the main and executive boards, had agreed to salary cuts of 20% as shareholders saw their 2019 final dividend cancelled.
“I would like to thank all stakeholders for their support and understanding in what has been a very challenging first half,” he said.
"We took decisive management actions on costs to protect near-term profitability, whilst at the same time investing in our platform to ensure we emerge from this period in a position of strength. We also focused on ensuring we retained a strong cash position, which we achieved, and we have access to sizeable borrowing facilities, if required.
"During the second quarter, activity levels started to pick up in several of the group's markets. As offices have been progressively reopened, we have seen improvements in our main forward looking KPIs, such as new opportunities, candidates sent to clients, interviews and offers. Whilst trading conditions remain unpredictable, we are choosing to invest in the business, returning all our staff to full time working and full pay in Q3. We are also investing in experienced hires from our competitors as well as continuing to invest in systems, such as our new operating system, Customer Connect.”
International talent solutions company Hudson Global has also released its second quarter results, showing revenue of $24.6 million decreased 7.0% from the second quarter of 2019 (3.0% in constant currency) and an adjusted net revenue of $8.9 million, a decrease of 23.4% (21.3% in constant currency).
Net loss improved to $0.8 million, or $0.27 per basic and diluted share, from a net loss of $0.9 million, or $0.29 per basic and diluted share, for the second quarter of 2019.
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