Adecco Group (ADEN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached €5.7 billion, down 5% organically year-over-year, with volumes stabilizing and robust margins despite a high comparison base and market headwinds.

• Gross margin was resilient at 19.4%, EBITA margin at 3.3%, and adjusted EPS at €0.68, with net income at €99 million and basic EPS at €0.59.

• Strong G&A savings and cost discipline supported Group EBITDA of €186 million and a 3.3% margin.

• The Group continues to execute its Simplify, Execute, and Grow agenda, focusing on market share gains, cost discipline, and digital transformation.

• Operating cash flow was €121 million in Q3, with year-to-date free cash flow at €117 million, up €5 million year-over-year.

Financial highlights

• Q3 revenues: €5.7 billion, down 5% organically year-over-year; gross profit €1,105 million (19.4% margin); EBITA €186 million (3.3% margin).

• SG&A expenses (excl. one-offs): €925 million, down 5% organically; G&A costs down 10% year-over-year.

• Net debt: €2,925 million at Q3 end; net debt/EBITDA (excl. one-offs): 3.1x.

• Free cash flow: €82 million in Q3; cash conversion ratio: 72% over last 12 months.

• Capex for Q3 was €39 million.

Outlook and guidance

• Q4 revenues, gross margin, and SG&A as a percent of revenues expected to be similar to Q3, including seasonality.

• Year-end net debt expected to be similar to prior year-end level.

• Management increasing G&A savings while protecting sales and delivery capacity to capture growth opportunities.