The Adecco Group’s third-quarter revenue fell 15% on an organic basis including adjustment for business days, against a backdrop of uncertainty. However, this is an improvement from the 28% decline in the second quarter.
The Zurich, Switzerland-based company noted a gradual recovery in business activity as lockdowns were eased across the group’s major markets; September revenue fell 14% organically and adjusted for business days, and October volumes showed further gradual improvement.
“The scale and breadth of our business and proactive account management approach have positioned us well to benefit from the increased demand in sectors such as e-commerce and logistics,” said CEO Alain Dehaze. “Despite lower revenues overall, profitability was strong as we maintained price discipline and demonstrated agile cost management.”
Dehaze cited its balanced portfolio as a differentiator, with outplacement provider Lee Hecht Harrison posting double-digit growth and Adecco’s outsourcing, consulting and up/re-skilling businesses proving “more resilient” than traditional staffing and recruitment.
| (€millions) | Q3 2020 | Q3 2019 | % change | % organic change | Q3 2020 (US$millions) |
| Revenue | € 4,835 | € 5,898 | -18% | -15% | $5,659 |
| Gross profit | € 949 | € 1,146 | -17% | -14% | $1,111 |
| Gross margin | 19.6% | 19.4% | – | – | – |
| Net income | € 80 | € 179 | -55% | – | $94 |
Dehaze also noted the recovery is likely to be bumpy given the rapidly evolving Covid-19 situation.
The company reported a restructuring charge of €89 million in the third quarter, primarily related to real estate rationalization and transformation of the group’s operations in Germany.
Permanent placement activity remained heavily impacted by the crisis, with revenue down 37% organically, while counter-cyclical career transition posted organic growth of 20%. Temporary staffing revenue fell by 17%.
Revenue in France, the company’s largest market, fell 18% on an organic basis.
North America general staffing revenue was down was down 14% on an organic basis, led by lower demand primarily from clients in the manufacturing sector. Permanent placement revenues fell 18% in North America general staffing.
Professional staffing in North America revenue fell 21% organically.
Revenue by geography
| (€millions) | Q3 2020 | Q3 2019 | % change | % organic change | % organic, business days adjusted | Q3 2020 (US$millions) |
| France | € 1,137 | € 1,393 | -18% | -18% | -18% | $1,331 |
| North America, UK & Ireland General Staffing | € 637 | € 746 | -15% | -12% | -12% | $746 |
| North America, UK & Ireland Professional Staffing | € 539 | € 832 | -35% | -28% | -28% | $631 |
| Germany, Austria, Switzerland | € 390 | € 492 | -21% | -21% | -22% | $457 |
| Benelux and Nordics | € 354 | € 480 | -26% | -26% | -26% | $414 |
| Italy | € 428 | € 463 | -8% | -8% | -8% | $501 |
| Japan | € 377 | € 380 | -1% | 3% | 4% | $441 |
| Iberia | € 249 | € 307 | -19% | -15% | -17% | $291 |
| Rest of World | € 587 | € 676 | -13% | -6% | -6% | $687 |
| Career Transition & Talent Development | € 137 | € 129 | 6% | 9% | 9% | $160 |
Revenue by brand
| (€millions) | Q3 2020 | Q3 2019 | % change | % constant currency | Q3 2020 (US$millions) |
| Adecco | € 3,716 | € 4,424 | -16% | -14% | $4,350 |
| Total workforce solutions | € 3,716 | € 4,424 | -16% | -14% | $4,350 |
| Modis | € 451 | € 515 | -12% | -10% | $528 |
| Badenoch+Clark/Spring Professional | € 287 | € 392 | -27% | -25% | $336 |
| Other professional brands | € 194 | € 380 | -49% | -48% | $227 |
| Total professional solutions | € 932 | € 1,287 | -28% | -26% | $1,091 |
| LHH | € 113 | € 103 | 10% | 14% | $132 |
| Pontoon | € 44 | € 44 | -1% | 1% | $52 |
| Ventures | € 30 | € 40 | -25% | -22% | $35 |
| Total talent solutions and ventures | € 187 | € 187 | 0% | 3% | $219 |
For more information on Adecco’s results, see SIA’s European coverage of the company.
Share price and market cap
Shares in Adecco closed up 5.61% to 48.58 Swiss francs (US$52.89); shares were 23.25% below their 52-week high. The company had a market cap of 7.34 billion Swiss francs (US$7.99 billion).