Adecco Group (ADEN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were EUR 5.8 billion, down 2% organically, with strong market share gains and outperformance versus peers for the eighth consecutive quarter.

• Gross margin was 19.4%, 70–90 basis points lower year-on-year, reflecting business mix and firm pricing.

• EBITA was EUR 179 million with a 3.1% margin, stable year-on-year, supported by significant G&A savings.

• Adjusted EPS was EUR 0.64, down 1% year-on-year at constant currency.

• Net debt/EBITDA ended at 3.0x, down 0.2x year-on-year, with improved cash flow and working capital management.

Financial highlights

• G&A expenses were 19% lower than the 2022 baseline, now 3.4% of revenues, with headcount down 12%.

• Cash flow from operations was EUR 162 million, up EUR 82 million year-on-year; free cash flow was EUR 128 million, up EUR 100 million.

• Cash conversion ratio reached 84%.

• DSO improved by half a day to 52.5 days, contributing EUR 35-40 million in cash benefits.

• CapEx guidance for 2024 was reduced from EUR 180 million to EUR 150 million, reflecting disciplined spending.

Outlook and guidance

• Q3 2024 revenue trends expected to mirror Q2, with challenging market conditions persisting.

• Gross margin expected to improve sequentially by 40-50 basis points, in line with normal seasonality.

• SG&A expenses projected to decrease by EUR 15-20 million in Q3 from Q2 levels, excluding one-offs.

• Continued focus on sustaining G&A savings below 3.5% of revenues per annum and positioning for future growth.