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Strong operational performance in Q4 2018
February 28, 2019


Margin improvement in most regions, supported by GrowTogether productivity gains

Q4 2018 summary and highlights

  • Revenues up 1% year-on-year organically1, and down 1% trading days adjusted (TDA), driven by slowdown in Europe
  • Continued strong development in permanent placement, revenues up 18% organically
  • Gross margin 19.1%; up 120 bps yoy, including positive temp price/mix impact of +30 bps
  • EBITA2 margin excluding one-offs3 4.8%, up 20 bps yoy; positive underlying development and favourable non-recurring items offset increased New Ventures investments and impact of German integration and regulation
  • Goodwill impairment in Germany (EUR 270 million); non-cash with no impact on dividend policy
  • Revenues in January 2019 declined 2% TDA year-on-year, with volumes in February slightly decelerating

FY 2018 summary and highlights

  • Revenues up 3% yoy organically and TDA, with deceleration in H2, as growth in Europe slowed
  • EBITA margin excluding one-offs 4.5%, down 40 bps yoy; positive impact from GrowTogether partly offsets increased strategic investments, reduction in CICE subsidies and German business transformation
  • Net income attributable to Adecco Group shareholders EUR 458 million, impacted by goodwill impairment
  • Continued strong cash flow; proposed dividend of CHF 2.50 per share, stable year-on-year
  • Strategy and investments on-track: GrowTogether driving improved productivity and Net Promoter Score; New Ventures expand solutions portfolio and create synergies

“The Group ended the year with a strong performance, despite an increasingly challenging market backdrop in Europe. While revenues declined by 1% (TDA), we outperformed in a number of key regions, including France, US General Staffing and Italy. Underlying profitability also further improved in Q4 2018, building on the positive trend of the prior quarter. Investments in our ‘Perform, Transform, Innovate’ strategy, which have impacted margins in 2017 and 2018, are now delivering the first financial results, in addition to laying strong foundations for future profitable growth.

In 2018, we Performed: expanding our market share in France and returning to growth in US General Staffing, in-line with 2017 commitments. Pricing programmes also gained traction and we delivered market leading growth in perm. Although Germany impacted the Group performance, we are making changes to strengthen the business.

We also Transformed: the GrowTogether programme is scaling up and driving productivity improvements, which supported improved operating margins in most regions in Q4. As we optimise and digitise internal processes, we reduce costs and also increase client and candidate satisfaction, as evidenced by a five point improvement in NPS in 2018.

And we Innovated: by adding unique businesses to our portolio of New Ventures, including General Assembly (up-/re-skilling) and Vettery (digital permanent placement). Combined with the strengths of our existing brands, we are creating a 360˚ service offering to support our customers across the whole HR solutions landscape, online and offline.

As the Group continues its digital transformation, our people remain our greatest asset – it is only through their passion and commitment that we succeed as a team. I therefore want to thank every one of our 34,000 colleagues worldwide for their contribution to making the Adecco Group the global #1 in HR solutions.”          

Alain Dehaze, Group Chief Executive Officer

1 Organic growth is a non-US GAAP measure and excludes the impact of currency, acquisitions and divestitures.

2 EBITA is a non-US GAAP measure and refers to operating income before amortisation and impairment of goodwill and intangible assets.

3 In 2018, EBITA included one-offs of EUR 59 million in Q4 2018 and EUR 93 million in FY 2018; in 2017, EBITA included one-offs of EUR 4 million in Q4 2017 and EUR 7 million in FY 2017.

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