Adecco Group AG (ADEN) AI Stock Analysis

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Adecco Group AG

(ADEN)

69Neutral

Adecco Group's stock is rated at 69, reflecting a stable financial position with strong cash flow generation and reasonable valuation. The company's strategic initiatives in AI and market share gains are promising; however, revenue declines and regional challenges weigh on the outlook. Technical indicators suggest caution with potential for near-term correction.

Positive Factors

Financial Performance

North America has now returned to growth with an exit growth rate of +4%.

Market Position

Adecco's successful contract wins in key markets like the US contribute to its improved performance.

Strategic Initiatives

The company continues to focus on the delivery of the turnaround plan in the US and is pleased with results so far.

Negative Factors

Customer Dependency

Adecco suffered disproportionately because of lower volumes, with their 3 largest customers facing structural decline.

Macroeconomic Uncertainty

Ongoing macroeconomic uncertainty, like potential impacts from US tariffs and EU cyclical recovery, poses a challenge for Adecco in the near term.

Project Cancellations

Projects with auto OEM are being stopped, delayed or cancelled, which is putting pressure on volume, utilization rate, and margins.

Adecco Group AG (ADEN) vs. S&P 500 (SPY)

Market Cap

CHF3.94B

Dividend Yield4.2%

Average Volume (3M)1.04M

Price to Earnings (P/E)13.7

Beta (1Y)1.18

Revenue Growth-5.29%

EPS Growth-8.93%

CountryCH

Employees33,597

SectorIndustrials

Sector Strength91

IndustryStaffing & Employment Services

Share Statistics

EPS (TTM)0.45

Shares Outstanding168,426,560

10 Day Avg. Volume1,174,579

30 Day Avg. Volume1,043,715

Financial Highlights & Ratios

PEG Ratio5.44

Price to Book (P/B)1.16

Price to Sales (P/S)0.00

P/FCF Ratio7.39

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

CHF28.41

Price Target Upside20.79% Upside

Rating ConsensusHold

Number of Analyst Covering10

Adecco Group AG Business Overview & Revenue Model

Company DescriptionAdecco Group AG, headquartered in Zurich, Switzerland, is a leading provider of human resource solutions. The company operates in sectors such as staffing, workforce solutions, and talent development, offering a comprehensive range of services including temporary staffing, permanent placement, career transition, and talent development. Adecco Group serves a diverse client base across industries, helping organizations manage their workforce needs effectively.

How the Company Makes MoneyAdecco Group AG generates revenue primarily through its staffing services, which include temporary and permanent placement. The company earns fees from clients for providing temporary staffing solutions, which involve supplying workers for short-term assignments. Additionally, Adecco charges recruitment fees for permanent placements when they successfully match a candidate to a client's long-term position. Beyond staffing, Adecco also offers outsourced human resource services, career transition, and talent development programs, contributing to its revenue streams. The company's earnings are further supported by strategic partnerships with large corporations and ongoing demand for flexible workforce solutions in various industries.

Adecco Group AG Financial Statement Overview

Summary

Adecco Group shows a stable financial position with moderate profitability and robust cash flow generation. Despite a decline in revenue growth, the company maintains a stable equity position and efficient cash generation. Future growth may require addressing revenue challenges and enhancing operational efficiency to improve margins.

Income Statement

Positive

Adecco Group's income statement shows moderate stability with a gross profit margin of approximately 19.4% and a net profit margin of 1.3% for the latest year. Revenue has decreased by 3.4% compared to the previous year, indicating challenges in maintaining top-line growth. The EBIT margin stands at 2.3%, showing operational profitability but with room for improvement. EBITDA margin is at 3.3%, reflecting moderate operational efficiency in the staffing industry.

Balance Sheet

Positive

The balance sheet of Adecco Group reveals a stable equity position with an equity ratio of 29.6% for the latest year. The debt-to-equity ratio is 0.97, indicating a balanced approach to leverage. ROE is relatively low at 8.5%, showing moderate returns on equity investment. The company maintains a stable asset base, which provides a solid foundation for potential growth despite the slight decrease in total assets over the year.

Cash Flow

Positive

Adecco Group's cash flow statement is strong with an operating cash flow to net income ratio of 2.3, signifying efficient cash generation relative to profit. Free cash flow grew significantly by 62.3% over the previous year, highlighting improved cash management. The free cash flow to net income ratio is 1.9, demonstrating robust cash flow generation relative to profitability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
23.14B	23.96B	23.64B	20.95B	19.56B
	Gross Profit
4.50B	4.97B	4.97B	4.28B	3.79B
	EBIT
541.00M	632.00M	547.00M	780.00M	118.00M
	EBITDA
760.00M	841.00M	770.00M	971.00M	307.00M
	Net Income Common Stockholders
303.00M	325.00M	342.00M	586.00M	-97.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
482.00M	556.00M	782.00M	3.05B	1.49B
	Total Assets
12.10B	12.43B	13.26B	11.87B	9.79B
	Total Debt
3.48B	3.67B	3.70B	3.48B	2.29B
	Net Debt
3.00B	3.12B	2.92B	429.00M	805.00M
	Total Liabilities
8.51B	8.83B	9.36B	8.06B	6.57B
	Stockholders Equity
3.58B	3.60B	3.88B	3.79B	3.21B
Cash Flow		Free Cash Flow
563.00M	347.00M	328.00M	590.00M	563.00M
	Operating Cash Flow
707.00M	563.00M	543.00M	722.00M	720.00M
	Investing Cash Flow
-157.00M	-209.00M	-1.45B	-206.00M	-162.00M
	Financing Cash Flow
-634.00M	-620.00M	-1.38B	980.00M	-290.00M

Adecco Group AG Technical Analysis

Technical Analysis Sentiment

Positive

Last Price23.52

Price Trends

50DMA

23.68

Negative

100DMA

22.42

Positive

200DMA

23.89

Negative

Market Momentum

MACD

0.31

Negative

RSI

55.63

Neutral

STOCH

73.43

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ADEN, the sentiment is Positive. The current price of 23.52 is above the 20-day moving average (MA) of 22.20, below the 50-day MA of 23.68, and below the 200-day MA of 23.89, indicating a neutral trend. The MACD of 0.31 indicates Negative momentum. The RSI at 55.63 is Neutral, neither overbought nor oversold. The STOCH value of 73.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:ADEN.

Adecco Group AG Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABBN	78 Outperform	CHF87.76B	23.98	31.34%	1.89%	2.15%	15.03%
SGSN	74 Outperform	CHF16.97B	28.28		3.65%	2.60%	3.16%
KNIN	73 Outperform	CHF23.09B	19.21		5.14%	13.34%	-4.15%
SCHP	72 Outperform	$31.64B	34.14	19.73%	1.90%	-2.24%	9.68%
FHZN	70 Outperform	CHF6.86B	21.01	11.24%	2.42%	7.28%	7.39%
ADEN	69 Neutral	CHF3.94B	13.72		4.20%	-5.29%	-8.93%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%

* Industrials Sector Average

Performance Comparison

CH:ADEN

Adecco Group AG

23.52

-10.99

-31.85%

CH:KNIN

Kuehne + Nagel International AG

194.50

-42.18

-17.82%

CH:SGSN

SGS SA

87.40

9.57

12.30%

CH:SCHP

Schindler Holding AG

301.60

67.96

29.09%

CH:ABBN

ABB Ltd

47.60

1.10

2.36%

CH:FHZN

Flughafen Zurich AG

223.60

36.79

19.69%

Adecco Group AG Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 13.51%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with significant market share gains and strategic advancements in AI deployment. However, these positives were offset by revenue declines, challenges in specific regions like Germany and France, and a cash flow deficit. While there are promising signs of operational improvements and strategic wins, the financial metrics indicate areas of concern that need addressing.

Q1-2025 Updates

Positive Updates

Market Share Gains

Adecco Group gained 130 basis points market share compared to key competitors, with a further 30 basis points gain at the group level in Q1 2025.

Strong Performance in Adecco Americas and APAC

Adecco Americas revenues grew 4%, driven by North America's return to growth and robust SME growth, while APAC revenues increased by 11% with strong share gains in Japan, Asia, and India.

Innovative AI Deployments

The launch of pre-screening AI agents in the UK and the AI-Core Platform suite in Germany promises efficiency gains and cost savings.

Successful Client Wins

Significant contracts secured with a German IT services provider and a leading market research company, demonstrating the value of Adecco's integrated service offerings.

Negative Updates

Revenue and Margin Decline

Group revenues were €5.6 billion, down 2% year-on-year, and the gross margin fell by 40 basis points to 19.4%, reflecting lower business income.

Challenges in Akkodis Germany

Akkodis Germany faced an 8% revenue decrease, with significant pressure in the auto sector, leading to a restructuring plan.

France Revenue Decline

French revenues dropped 9% due to market headwinds and pressure from major clients, impacting the EBITA margin by 60 basis points.

Cash Flow Deficit

Cash flow from operating activities was negative €144 million, reflecting working capital absorption and lower business income.

Company Guidance

During the Adecco Group's first quarter 2025 earnings call, the company reported several key metrics reflecting its financial performance and strategic progress. Revenues for the quarter were €5.6 billion, showing a 2% year-on-year decline on an organic, trading days-adjusted basis, but a 3% sequential increase. The gross margin stood at 19.4%, 40 basis points lower than the previous year due to business mix and pricing strategies. EBITA, excluding one-offs, was €132 million, resulting in a margin of 2.4%, also 40 basis points lower year-on-year. Adjusted EPS was $0.48, marking a 20% year-on-year decrease. Cash flow from operating activities was negative at €144 million, with a cash conversion ratio of 105%. The company continues to focus on market share gains, evidenced by a 30 basis point rise this quarter, and is implementing strategic initiatives such as adopting AI solutions and executing turnaround plans in specific regions. The guidance for Q2 indicates expectations of a lower sequential gross margin due to normal seasonality, with SG&A expenses anticipated to be modestly lower sequentially as the company manages capacity and seeks further G&A savings.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.