The Adecco Group: Q4 & Full Year 2022 Results

February 28, 2023 Bharath

AD HOC ANNOUNCEMENT pursuant to Art. 53 Listing Rules of SIX Swiss Exchange

ZURICH, Feb. 28, 2023 /PRNewswire/ — Q4 & Full Year 2022 Results

Winning market share; strong revenue growth and gross margin

Q4 HIGHLIGHTS

Revenues +13% reported, +5% yoy organic TDA; up in all GBUs
Strong return on growth investment plan driving market share gains; relative revenue growth +550 bps in Q4, with improvement of +1,500 bps yoy. France, DACH, APAC and LatAm clearly outperform
Strong gross margin of 21.0%, supported by portfolio shift, positive mix, and pricing
Robust EBITA margin excl. one-offs of 3.7%; mainly reflecting lower benefit from special items, growth investment, a lower contribution from Adecco US, LHH Recruitment Solutions and accretion from AKKA; productivity +2% qoq
Operating income €113 million, reflecting higher amortisation and one-offs, both relating to the AKKA acquisition
Basic EPS €0.39; Adjusted EPS €0.76

FULL YEAR HIGHLIGHTS

Revenues +13% reported, +5% yoy organic TDA ; up in all GBUs
Strong gross margin of 21.0%, supported by portfolio shift, positive mix, and pricing
Robust EBITA margin excl. one-offs of 3.5%, mainly reflecting lower benefit from special items, growth investment, a moderated contribution from LHH and Adecco US and accretion from AKKA
Operating income €547 million, reflecting higher amortisation and one-offs, both relating to the AKKA acquisition
Basic EPS €2.05; Adjusted EPS €3.28
AKKA delivers EBITA margin and EPS accretion in year 1; ~€25 million synergies realised
Healthy 70% cash conversion maintained in investment phase: Cash Flow from Operating Activities €543 million
Simplify, Execute, Grow agenda driving positive momentum: Global Sales restructured; Ian Lee appointed to Executive Committee as President, Geographic Regions to ensure local perspectives are represented
Proposed dividend per share CHF 2.50, composed of CHF 1.85 gross plus CHF 0.65 from reserves not subject to withholding tax

Denis Machuel, Adecco Group CEO, commented:

“The Group had a strong finish to 2022 as we continued to drive momentum from our investment plan. We achieved excellent growth in Q4, with Adecco significantly outpacing the market. The newly combined Akkodis business performed well, over-delivering on its synergy target for 2022 and tracking on target for synergy capture for 2023. In LHH, our digital coaching business, Ezra, posted strong growth, and our Career Transition business delivered excellent results as the team successfully captures increasing demand amidst an uptick in corporate restructuring driven by the US technology sector.

Gross margins were strong for the quarter. Our Simplify, Execute, Grow agenda is being progressed across the organisation to accelerate implementation of our existing strategy and improve both operational and financial performance. We are very confident we will achieve the planned cost reduction target. Looking ahead, we are laser focused on driving share gains, with enhanced productivity and profitability, across all our business units this year.”

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