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Grow Together and Improved Business mix drive margin strength
February 26, 2020


Economic outlook remains uncertain and continues to impact revenues

Q4 2019 summary and highlights

  • Revenues down 3% year-on-year, and down 4% organically1 and trading days adjusted (TDA)

  • Further gross margin improvement, up 20 bps yoy to 19.3%, driven by positive business mix and value-based pricing

  • EBITA2 margin excluding one-offs3 4.9%, up 10 bps yoy; GrowTogether productivity improvements and business mix more than offset the impact of lower revenues and discrete benefits in the prior year

  • Strong cash flow with DSO improving by one day year-on-year and cash conversion at 93%

  • Revenues in January 2020 down 5% TDA year-on-year, with volumes in February indicating a similar trend  

FY 2019 summary and highlights

  • Revenues down 2% year-on-year, and down 3% yoy organically and TDA, as economic growth and staffing markets slowed in Europe and North America

  • EBITA margin excluding one-offs 4.6%, up 10 bps yoy, with GrowTogether driving structural margin improvement

  • Net income attributable to Adecco Group shareholders EUR 727 million, up 59% year-on-year

  • EUR 600 million share buyback announced in addition to proposed dividend of CHF 2.50 per share

  • GrowTogether delivered EUR 140 million productivity savings, ahead of target, with improved Net Promoter Score; General Assembly and digital ventures achieved strong growth and synergies within the Adecco Group ecosystem  

“The Group concluded 2019 with strong performance against a backdrop of ongoing economic uncertainty and market slowdown. Despite the challenging conditions that impacted revenues, we did not compromise long-term investments and remained focused on delivering our ‘Perform, Transform, Innovate’ strategy to position the business for profitable growth. The results of our GrowTogether programme, pricing actions and strengthened business mix drove a structural improvement in profitability, with Q4 gross margin up 20 bps year-on-year, the sixth consecutive quarterly increase.

In 2019, GrowTogether was further embedded into the organisation, over-achieving against its productivity commitment and supporting a 10 bps improvement in EBITA margin. This profitability improvement was delivered while we continued to invest in new technology, building our digital product portfolio, and strengthening the ventures in line with our innovation strategy. Strong growth was achieved at General Assembly, and we gained further customer traction with our unique 360 ecosystem of HR solutions and brands. These results demonstrate that our strategic priorities are the right ones, and we are successfully executing against them. We also generated improved free cash flow and ended the year with a strong balance sheet, allowing us to announce a share buyback of EUR 600 million, in addition to the ordinary dividend, for a total cash return to shareholders of close to EUR 1 billion for 2019.

2020 will mark the final year of our current strategic cycle and focus remains on delivering further margin improvement and profitable growth. Through GrowTogether we are deploying and scaling proven digital tools, including our integrated front-office solution and global candidate app, to differentiate our business and make our operations more efficient. We are also fully embedding lean processes (PERFORM) into how we work. We remain committed to achieving the EUR 250 million GrowTogether productivity target for 2020, and to leveraging our 360 HR solutions ecosystem to support the success of our clients and candidates, and to deliver profitable growth.”

Alain Dehaze, Group Chief Executive Officer

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

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

3In 2019, EBITA included one-offs of EUR 36 million in Q4 2019 and EUR 81 million in FY 2019; in 2018, EBITA included one-offs of EUR 59 million in Q4 2018 and EUR 93 million in FY 2018.

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