Adecco Q1 2025 slides: Market share gains amid mixed regional performance

Adecco Group (SWX:SIX:ADEN) reported market share gains despite revenue declines in its Q1 2025 earnings presentation on May 8, highlighting regional variations in performance and strategic AI initiatives to drive future growth.

Quarterly Performance Highlights

The staffing and HR solutions provider reported revenues of €5.57 billion for Q1 2025, representing a 2% year-over-year organic decline. Despite this overall decrease, the company achieved a significant 130 basis points market share gain in its core Adecco business, demonstrating resilience in challenging markets.

"Strong execution with margins reflecting business mix, agile capacity management, good cost discipline and favourable timing of FESCO JV income," the company noted in its presentation.

Gross profit reached €1,084 million with a margin of 19.4%, while EBITA came in at €132 million, representing a 2.4% margin. Adjusted earnings per share stood at €0.48, with operating cash flow at -€144 million, which the company noted is in line with normal seasonal patterns as Adecco typically experiences cash outflows in the first half of the year.

As shown in the following financial overview chart, the company’s quarterly performance metrics reflect both challenges and strategic progress:

Regional Performance Analysis

Adecco’s regional performance showed significant variations, with the US returning to growth and APAC demonstrating strong results, while European markets remained challenging.

The Adecco APAC region was a standout performer with 11% year-over-year organic revenue growth in Q1 2025, reaching €645 million. The EBITA margin in this region expanded by 260 basis points to 7.4%, boosted by the timing of income from the FESCO joint venture. The company highlighted retail and consulting as particularly strong sectors in APAC, with manufacturing also showing robust performance.

The following chart illustrates the strong performance in APAC and the return to growth in the Americas:

In the Americas, revenues increased by 4% year-over-year to €667 million, a significant improvement from the 6% decline in Q4 2024. The US market showed particularly encouraging signs with a "significant improvement" and "solid exit rate," according to the presentation. Consumer goods and manufacturing were strong performers in the region, while the automotive sector remained weak.

European markets presented a more challenging picture, with France experiencing a 9% revenue decline and the broader EMEA region (excluding France) down 2% year-over-year:

The company noted that manufacturing and automotive sectors were particularly weak in Europe, while logistics faced challenges in France. Despite these headwinds, Adecco managed to outperform the broader market in France and maintained relatively stable EBITA margins in the region.

Strategic AI Initiatives

A key focus of Adecco’s presentation was its investment in AI solutions to accelerate profitable growth. The company has launched a pre-screening agent based on Salesforce (NYSE:CRM)’s Agentforce platform, enabling 24/7 candidate exchanges and reducing the need for recruiters to conduct pre-screening calls.

Additionally, Akkodis, part of the Adecco Group, has developed an AI-Core Platform suite to help companies build AI models using low/no code with ready-to-use plugins and agents. The company claims this solution delivers efficiency gains, cost savings, and faster project delivery while maintaining high security and GDPR compliance.

The presentation also revealed a potential new technology venture with Salesforce called "r.Potential," in which Adecco would be the majority owner. This enterprise platform would leverage AI and agentic technology to optimize workforce configurations and distribute tasks between humans and digital workers.

Financial Position and Outlook

Adecco maintained a robust financial structure with strong liquidity, including an undrawn €750 million revolving credit facility. The company reported that 80% of its debt is fixed, with no covenants on debt. However, the net debt to EBITDA ratio stood at 3.2x, which the company acknowledged was "weighed by lower EBITDA." Adecco is targeting a ratio of ≤1.5x by the end of 2027.

For the near-term outlook, Adecco highlighted its focus on agile capacity management and strong cost control. The company reported a 6% year-over-year reduction in full-time employees while improving productivity (gross profit per selling FTE) by 1%.

The presentation emphasized Adecco’s ability to navigate macro-economic uncertainty with a resilient business model, committing to a 3% EBITA margin floor annually. The company is pursuing an agile, granular approach that includes:

• Ensuring proximity and support to clients
• Strengthening MSP, SOW engagements & outsourcing
• Lowering cost-to-serve through centralization of tasks in hubs via Digital Delivery
• Deploying agentic AI
• Executing turnaround of Akkodis Germany
• Driving free cash flow and strict DSO management
• Remaining agile with front-line capacity and driving productivity

In summary, Adecco’s Q1 2025 presentation revealed a company navigating challenging market conditions with strategic initiatives focused on digital transformation and AI implementation, while demonstrating the ability to gain market share despite overall revenue declines.

Full presentation:

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