• Revenue: EUR23.1 billion, decreased by 3% year-on-year on an organic trading days adjusted basis.
• Gross Profit: Nearly EUR4.5 billion, 7% lower year-on-year.
• Gross Margin: Contracted 80 basis points to 19.4%.
• EBITA (excluding one-offs): EUR709 million, 18% lower.
• EBITA Margin: 3.1%, 50 basis points lower year-on-year.
• Cash Flow from Operating Activities: EUR491 million in Q4, an increase of EUR174 million year-on-year.
• Free Cash Flow: EUR563 million for the full year.
• Net Debt-to-EBITDA Ratio: 2.8 times at year-end.
• Dividend per Share: Proposed CHF1, representing a payout of 42%.
• G&A Savings: EUR174 million net of inflation, exceeding the original EUR150 million target.
• Market Share Growth: 200 basis point share gain in 2024 versus key competitors.
• Client NPS: Rose 2 points in the Adecco GBU.
• Candidate NPS: Rose 2 points in the Adecco GBU.

• Warning! GuruFocus has detected 4 Warning Signs with AHEXF.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Adecco Group AG (AHEXF) achieved a relative revenue growth of 200 basis points in 2024, demonstrating its ability to gain market share despite challenging market conditions.
• The company exceeded its G&A savings target, delivering EUR174 million net of inflation by year-end, surpassing the original EUR150 million run rate target.
• Adecco Group AG (AHEXF) delivered strong cash generation, reflected in a 109% cash conversion ratio, significantly improved from 63% in the prior year.
• The company is accelerating the adoption of AI technologies to revolutionize the recruitment process and build a competitive edge, with strategic partnerships with Salesforce, Bullhorn, and Microsoft.
• Adecco Group AG (AHEXF) has updated its dividend policy to accelerate deleveraging and increase financial flexibility, aiming for a net debt-to-EBITDA ratio at or below 1.5 times by the end of 2027.

Negative Points

• Revenues decreased by 3% year-on-year on an organic trading days adjusted basis to EUR23.1 billion, with gross profit nearly EUR4.5 billion, 7% lower year-on-year.
• The EBITA margin at 3.1% was 50 basis points lower year-on-year, reflecting challenging market conditions and lower volumes.
• The tech sector downturn continued to impact Akkodis, with revenues 4% lower and an EBITA margin of 5.5%, mainly reflecting this headwind.
• LHH's revenues were 6% lower, weighed by challenging markets and a high comparison in career transition, with an EBITA margin of 6.3%.
• The macroeconomic and geopolitical environment has been unfavorable for longer than expected, preventing the group from deleveraging under the current dividend policy.

Q & A Highlights

Q: Can you expand on the dividend decision and what led to the conclusion of this year's dividend level? How should we think about future dividends? A: Denis Machuel, CEO: The updated dividend policy is designed to accelerate deleveraging and provide financial flexibility. The macroeconomic and geopolitical environments have delayed our deleveraging efforts, necessitating this change. The policy now focuses on a 40% to 50% payout ratio of adjusted EPS, without a floor, allowing us to balance growth investments and shareholder returns. Coram Williams, CFO: This adjustment frees up EUR250 million for deleveraging, and as margins and earnings improve, the dividend will increase accordingly.

Q: What are your assumptions for growth in the US in the first half of 2025? Is it mainly market share gains or broader market recovery? A: Denis Machuel, CEO: We are seeing sequential improvements in Adecco US, particularly in the SME segment, which grew 1% this quarter. Large client losses are behind us, and we have significant wins that will support growth. We expect Adecco US to return to year-on-year revenue growth in the first half of 2025, driven by market share gains and some positive momentum in temp volumes.

Q: Can you reconcile the improving momentum with weak data from staffing markets like France, Germany, and the UK? A: Coram Williams, CFO: While markets in LatAm, APAC, and Southern Europe continue to grow, Northern Europe, France, the UK, and Germany remain challenging. However, we are seeing modest weekly volume improvements across a broad number of countries, indicating some positive momentum, although the overall market shape remains unchanged.

Q: What are the drivers behind the changes in your reporting structure, especially the formation of EMEA? A: Coram Williams, CFO: The new reporting structure reflects the way we manage the business, with Adecco now organized into four key leadership segments. This streamlining aligns with our management structure, and we will continue to provide detailed color on key markets within these segments.

Q: What are your expectations for the outplacement business going forward? A: Denis Machuel, CEO: We are pleased with the performance of our career transition (CT) business, which remains strong despite a slight revenue decrease. We have a solid pipeline and are expanding into the SME segment in the US. We are also enhancing the customer experience with digital tools like our AI-powered career canvas, which supports scalable career guidance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.