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Adecco Group's Financial Performance: Q4 and Full Year 2024

In a comprehensive report released on February 26, 2025, Adecco Group detailed their financial results for the fourth quarter and the entire year of 2024, showcasing a blend of challenges and strategic maneuvers that impacted the company's performance. Despite reporting a revenue decline of 5% for Q4, company executives emphasized resilience through strong cash flow and robust gross margins, solidifying their confidence in the company’s market positioning.

Q4 Highlights

During the fourth quarter of 2024, Adecco Group faced a 5% decrease in revenue, with organic growth down by 3%. Breaking it down by business units, Adecco itself reported a 5% decline, Akkodis a 6% drop, and LHH experienced a 3% decrease. Despite these figures, the gross margin remained solid at 19.2%, buoyed by firm pricing strategies and an effective volume mix. Moreover,

the EBITA margin stood at 3.2%. Although negative operational leverage played a role, significant cuts in general and administrative costs helped in mitigating the impact.

Moreover, the operational profit reached €144 million, with a net income of €73 million, translating to an adjusted earnings per share (EPS) of €0.63. Notably, the company reported a strong operational cash flow of €491 million, marking a year-on-year increase of €174 million.

Full Year Performance

Turning to the complete year of 2024, Adecco Group reported a 3% revenue decline, again reflecting a 2% drop in organic growth. A noteworthy achievement was the market share gain of +200 basis points, evidencing robust competitive positioning amid market challenges. The annual gross margin improved slightly to 19.4% with a stable EBITA margin of 3.1%.

For the year, operational results indicated a profit of €541 million and a net income of €303 million, yielding a basic EPS of €1.81 and an adjusted EPS of €2.55. Further emphasizing financial strength, Adecco generated an operational cash flow of €707 million with a free cash flow reaching €563 million, showcasing a remarkable conversion rate of 109%.

However, the company also reported a net debt of €2.5 billion, which surpassed management expectations. In terms of cost management, Adecco successfully exceeded its target for general and administrative expense savings by reducing costs by over €174 million, adjusted for inflation compared to the 2022 base.

The company's strategy included an updated dividend policy, proposing a dividend payout of 1.00 CHF per share. The debt-to-EBITDA ratio stood at 2.8x at the end of 2024, significantly above the 1.5x goal scheduled for the end of 2027.

Strategic Outlook

Denis Machuel, CEO of Adecco Group, expressed optimism regarding the firm’s strategic direction with their initiative, Future@Work Reloaded. He noted the consistent market share gains during challenging periods, coupled with a refined business model that has effectively reduced costs by over 20%. Adecco also highlighted its commitment to adopting AI-driven technologies and enhancing its advanced distribution engine. The CEO reiterated the company’s focus on effective cash generation and flexibility, indicating confidence in future market improvement and sustained business growth.

These results paint a complex yet promising picture of Adecco Group's trajectory. The company’s ability to navigate through economic adversities while retaining a strong position emphasizes its potential for recovery and growth in the years to come. As Adecco continues to innovate and optimize its operations, stakeholders would be keenly observing how these strategies unfold against the backdrop of evolving market conditions.