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Adecco Group AG (CH:ADEN)
:ADEN
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Adecco Group AG
(ADEN)
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Rating:71Outperform
Price Target:
CHF26.00
▲(14.74% Upside)
Adecco Group AG's overall stock score reflects a stable financial performance with consistent gross margins but challenges in revenue growth and profitability. The earnings call provided positive insights into revenue growth and market share gains, particularly in key regions, which supports a positive outlook. The stock's valuation is reasonable, with an attractive dividend yield. Technical indicators suggest a neutral trend, with potential for upward momentum.
Positive Factors
Market Share Gains
The company's ability to increase market share indicates a strong competitive position and effective strategic execution, which can drive long-term growth and stability in the staffing industry.
Strong Regional Performance
Robust growth in key regions like the Americas and APAC suggests effective regional strategies and potential for sustained revenue expansion, enhancing the company's global footprint.
Client Wins and Strategic Execution
Securing major clients across diverse sectors demonstrates Adecco's competitive edge and ability to capture new business opportunities, supporting long-term revenue growth and market positioning.
Negative Factors
Challenges in Akkodis Germany
The decline in Akkodis Germany's performance highlights sector-specific challenges and operational inefficiencies, which may hinder overall profitability and require strategic adjustments.
Pressure in Permanent Placement
The decline in permanent placement revenues indicates market challenges and potential shifts in demand, which could affect long-term revenue stability and necessitate strategic pivots.
Lower EBITA Margin
A lower EBITA margin reflects pressures on operational efficiency and profitability, which may impact financial health and require cost management improvements to enhance margins.
Adecco Group AG (ADEN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF3.72B
Dividend Yield4.41%
Average Volume (3M)842.19K
Price to Earnings (P/E)13.7
Beta (1Y)1.13
Revenue Growth-4.68%
EPS Growth-5.79%
CountryCH
Employees33,597
SectorServices
Sector StrengthN/A
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.43
Shares Outstanding168,426,560
10 Day Avg. Volume653,147
30 Day Avg. Volume842,188
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF30.44Price Target Upside34.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Adecco Group AG Business Overview & Revenue Model
Company DescriptionAdecco Group AG, together with its subsidiaries, provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa. It offers flexible placement, permanent placement, outsourcing, training, upskilling and reskilling, career transition and workforce transformation, technology consulting and talent, tech academy, digital staffing services, and talent advisory and solutions under the Adecco, Adia, General Assembly, Badenoch + Clark, LHH, pontoon, Spring, and Modis. The company also operates Hired, a talent recruitment platform. As of December 31, 2021, it operated approximately 4,300 branches in 59 countries and territories. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is based in Zurich, Switzerland.
How the Company Makes MoneyAdecco Group AG generates revenue primarily through its staffing and recruitment services. The company charges clients a fee based on a percentage of the employee's salary or a fixed amount for placing candidates in temporary or permanent roles. Key revenue streams include temporary staffing services, which account for a significant portion of earnings, as well as permanent placements and outsourcing services. Additionally, Adecco offers consulting services related to workforce management and employee training, further diversifying its income sources. Strategic partnerships with various organizations enhance its service offerings, while economic factors and labor market trends significantly impact its earnings.
Adecco Group AG Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and market share gains, particularly in the Americas and APAC regions, along with successful client wins and effective cost management. However, challenges in Akkodis Germany and pressure in permanent placement impacted overall profitability.Q2-2025 Updates
Positive Updates
Revenue Growth and Market Share Gains
Adecco Group's revenue increased by 2% year-on-year on a trading day adjusted basis. Market share gains were significant, with the Group gaining 205 basis points and Adecco 130 basis points in Q2.
Strong Performance in Americas and APAC
Adecco Americas saw a 14% year-on-year revenue growth, while Adecco APAC revenues grew by 9%, led by Japan (7%), Asia (17%), and India (13%).
Client Wins and Strategic Execution
Adecco secured significant client wins, including a global OEM for EV battery production, a global consulting firm for permanent recruitment, and a French defense company for a multiyear contract. These wins reflect commercial excellence and competitive edge.
Successful Cost Management and Cash Flow
Operating cash flow was EUR 81 million with strong cash conversion at 98%. SG&A expenses were 1% lower year-on-year, demonstrating effective cost management.
Ezra's Record Performance
Ezra's revenues increased by 39%, achieving a new record level with a strong pipeline and healthy gross margin expansion.
Negative Updates
Challenges in Akkodis Germany
Akkodis' revenues were 6% lower year-on-year, significantly impacted by headwinds in the automotive sector in Germany. The EBITA margin dropped by 330 basis points, prompting a EUR 40 million savings plan and 450 job cuts.
Pressure in Permanent Placement
Permanent Placement revenues were down by 9%, with significant declines in key markets like the U.S., France, and the U.K., due to market downturns.
Lower EBITA Margin
The Group's EBITA margin excluding one-offs was 2.5%, 60 basis points lower year-on-year, due to various factors including organic gross margin developments and the timing of FESCO JV income.
Company Guidance
In the Adecco Group's Q2 2025 results call, several key metrics were highlighted that underline the company's performance and strategic direction. The Group increased market share by 205 basis points, with Adecco gaining 130 basis points. Revenue grew by 2% year-on-year on a trading day adjusted basis, driven by Adecco Americas' 14% increase and Adecco APAC's 9% rise. The gross profit stood at EUR 1.1 billion with a margin of 18.9%. EBITDA, excluding one-offs, was EUR 141 million, representing a 2.5% margin. Adjusted EPS was EUR 0.46, while operating cash flow was EUR 81 million with a cash conversion rate of 98%. The Group's gross margin was healthy at 18.9%, although it was 50 basis points lower year-on-year. The company expects profitability to improve in the second half of the year, with a commitment to achieve a 3% EBITA margin floor for the full year. The leverage ratio was targeted to be brought down to 1.5x or below by the end of 2027, driven by improved H2 margins and strong cash flow management.Adecco Group AG Financial Statement Overview
Summary
Adecco Group AG demonstrates stable core operations with consistent gross margins but faces challenges in revenue growth and profitability. The balance sheet is moderately leveraged, providing a stable financial base. Cash flow generation shows some weaknesses, particularly in free cash flow growth. Overall, the company maintains a stable financial position but needs to address growth and profitability challenges to improve its financial health.Income Statement
Adecco Group AG's income statement shows a mixed performance. The gross profit margin is stable around 19-21%, indicating consistent profitability from core operations. However, the net profit margin has declined to 1.26% in TTM, reflecting reduced overall profitability. Revenue growth is negative in recent periods, indicating challenges in expanding sales. EBIT and EBITDA margins have also decreased, suggesting pressure on operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a moderate financial position. The debt-to-equity ratio is slightly above 1, indicating a balanced but slightly leveraged capital structure. Return on equity is around 8.4% in TTM, showing moderate efficiency in generating returns for shareholders. The equity ratio is not directly provided, but the overall asset base supports a stable financial structure.70
Positive
Cash Flow
Cash flow analysis reveals some concerns. Free cash flow growth is negative in TTM, indicating potential challenges in generating cash. The operating cash flow to net income ratio is low, suggesting limited cash generation relative to net income. However, the free cash flow to net income ratio remains healthy at 77.9%, indicating decent cash conversion from profits.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.93B | 23.14B | 23.96B | 23.64B | 20.95B | 19.56B |
| Gross Profit | 4.41B | 4.50B | 4.97B | 4.97B | 4.28B | 3.79B |
| EBITDA | 718.00M | 760.00M | 841.00M | 770.00M | 971.00M | 307.00M |
| Net Income | 290.00M | 303.00M | 325.00M | 342.00M | 586.00M | -97.00M |
Balance Sheet | ||||||
| Total Assets | 11.85B | 12.10B | 12.43B | 13.26B | 11.87B | 9.79B |
| Cash, Cash Equivalents and Short-Term Investments | 270.00M | 482.00M | 556.00M | 782.00M | 3.05B | 1.49B |
| Total Debt | 3.65B | 3.48B | 3.67B | 3.70B | 3.48B | 2.29B |
| Total Liabilities | 8.64B | 8.51B | 8.83B | 9.36B | 8.06B | 6.57B |
| Stockholders Equity | 3.20B | 3.58B | 3.60B | 3.88B | 3.79B | 3.21B |
Cash Flow | ||||||
| Free Cash Flow | 415.00M | 563.00M | 347.00M | 328.00M | 590.00M | 563.00M |
| Operating Cash Flow | 549.00M | 707.00M | 563.00M | 543.00M | 722.00M | 720.00M |
| Investing Cash Flow | -144.00M | -157.00M | -209.00M | -1.45B | -206.00M | -162.00M |
| Financing Cash Flow | -416.00M | -634.00M | -620.00M | -1.38B | 980.00M | -290.00M |
Adecco Group AG Technical Analysis
Negative
22.66
Price Trends
23.60
Negative
24.19
Negative
23.43
Negative
Market Momentum
-0.12
Positive
44.65
Neutral
9.87
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ADEN, the sentiment is Negative. The current price of 22.66 is below the 20-day moving average (MA) of 23.39, below the 50-day MA of 23.60, and below the 200-day MA of 23.43, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 44.65 is Neutral, neither overbought nor oversold. The STOCH value of 9.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:ADEN.
Adecco Group AG Peers Comparison
UnderperformOutperform
Sector (55)
CH:ADEN
Adecco Group AG
22.66
-4.04
-15.13%
CH:KNIN
Kuehne + Nagel International AG
156.45
-53.67
-25.54%
CH:SGSN
SGS SA
91.30
1.88
2.10%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.