2023-11-02 11:11:03
Zurich (awp) – Recruitment and temporary work specialist Adecco continued to gain market share in the third quarter and intends to continue its momentum, despite a weakening economy. The Zurich company also exceeded expectations in terms of profitability, thanks, among other things, to progress in the savings program.
At 5.96 billion euros, or approximately 5.72 billion Swiss francs, revenues fell by 0.7% year-on-year, due to calendar and currency effects. In organic terms, growth stood at 3% compared to the third quarter of 2022.
“Adecco gained market share in all regions, while margin improvement was driven by pricing discipline, productivity gains and strict cost control,” said Denis Machuel, Managing Director ( CEO) of the group.
For his part, Chief Financial Officer (CFO) Coram Williams was proud of the company’s growth rate, which is well ahead of the market and its main competitors: “the gap has not been this high for a long time” , he told AWP.
Adjusted operating profit (Ebita) came to 235 million euros, for a related margin of 4.0%, up 0.4 percentage points year-on-year. Net profit reached 103 million, down 4% compared to the comparison period.
The analysts consulted by AWP had hit the mark regarding revenues, but for the rest, they had not been optimistic enough. Indeed, organic growth was expected on average at 1.8%, while adjusted Ebita was expected at 194 million and the related margin at 3.2%.
Progress in the savings program
Expenses excluding exceptional items totaled 1.01 billion, down 1% year-on-year in organic terms. One-off costs of 27 million, linked to the integration of Akka and the implementation of the savings program, were recorded. On this last subject, Adecco has raised the objective of reducing general and administrative (G&A) expenses for 2023. After 24 million euros saved in the third quarter, the total amount should be around 90 million, instead of 60 million previously targeted. This does not change the mid-2024 objective of 150 million fewer expenses, explained the CFO.
Productivity, in terms of gross profit per employee, which increased by 6%, has been greatly improved. “This shows that our strategy is working,” said the CFO.
Net debt rose to 2.82 billion, for a ratio to Ebita of 2.9, excluding exceptional effects. The company wants to continue to reduce its debt ratio.
For the final quarter, Adecco aims to maintain its margins and the ratio of expenses to revenues. Organic growth might nevertheless slip into the red due to a strong basis of comparison and mixed developments depending on the markets.
Adecco also announced the appointment on January 1 of Daniela Seabrook as head of human resources and member of management. She will take over from Gordana Landen, who is retiring at the end of the same month.
Analysts unanimously welcomed a performance above expectations. On the stock market, the stock jumped 12.3% to 38.78 Swiss francs, in an SPI up 1.0%.
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