Adecco Group (ADEN) Q1 2025 earnings summary

Executive summary

• Achieved further market share gains in Q1 2025, outperforming key competitors by 130 basis points in revenue growth, with strong execution in cost management and US operations returning to growth.

• Revenues were €5.573 billion, down 2% year-on-year organically but up 3% sequentially; Adecco US and APAC returned to growth, while Europe remained under pressure.

• Gross margin was 19.4%, down 40 basis points year-on-year, with EBITA at €132 million (2.4% margin), reflecting business mix, pricing, and favorable FESCO JV income timing.

• Adjusted EPS was €0.48, down 20% year-on-year; net income attributable to shareholders was €60 million, down 19% year-on-year.

• Operating cash flow was -€144 million, with a strong LTM cash conversion ratio of 105%.

Financial highlights

• Revenues declined 2% year-on-year to €5.573 billion, with sequential growth of 3% from Q4 2024.

• Gross profit was €1,084 million (19.4% margin), down 5% organically; EBITA (excluding one-offs) was €132 million (2.4% margin), down 18% organically.

• Net debt at end of Q1 was €2.701 billion; net debt-to-EBITDA ratio (excl. one-offs) at 3.2x.

• LTM cash conversion was 105%, and DSO improved to 52.5 days.

• SG&A expenses (excl. one-offs) expected to be modestly lower sequentially.

Outlook and guidance

• Modest positive momentum in volumes continues into Q2 2025, with group expecting sequentially lower gross margin due to seasonality.

• Management remains committed to a 3% EBITDA margin floor annually and aims to reduce net debt-to-EBITDA to 1.5x or below by end of 2027.

• Focus remains on agile capacity management, productivity, and G&A savings in uncertain markets.