HALF YEAR REPORT 2022
INTRODUCTION AND CONTENTS
Market share
momentum, solid growth
and margin
For�more�information�go�to
adeccogroup�com
In this report
Operating�and�financial�review |
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Consolidated�statements�of�cash�flows |
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Selected�financial�information |
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Consolidated�statements�of�changes�in� |
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Consolidated�balance�sheets |
�� |
shareholders'�equity |
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Consolidated�statements�of�operations |
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Notes�to�consolidated�financial�statements |
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Consolidated�statements�of� |
Non-US�GAAP�information�and� |
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comprehensive�income |
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financial�measures |
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1 |
2022 Half Year Report |
O P E R A T I N G A N D F I N A N C I A L R E V I E W
in millions, except share and per share information
Overview
During�the�first�half�of�������the�Company�focused�on�gaining�market� share��The�investment�in�headcount��particularly�in�Adecco�delivered� significant�results��with�notable�improvement�in�relative�revenue�growth� in�several�regions��Revenues�increased�by ���both�organically��and� trading�days�adjusted��led�by�the�Akkodis�GBU��LHH�Recruitment� Solutions�and�Adecco�APAC�and�Southern�Europe�&�EEMENA��
Gross�margin�was�����bps�above�the�first�half�of������on�a�reported� basis��Organically�the�gross�margin�increased�by����bps��reflecting�the� portfolio's�shift�into�higher�value�activities�and�positive�pricing�dynamics.
Selling��general��and�administrative�expenses��SG&A��excluding�one-offs�� increased�����organically��As�a�percentage�of�revenues��SG&A� excluding�one-offs�was��������compared�to�������a�year�ago��driven� primarily�by�investments�in�sales�capacity��FTE employees�increased�
����organically�year-on-year��
in�EUR�
The�EBITA��margin�excluding�one-offs�was�������a�decrease�of����bps�year-on-year�on�a�reported basis�due�to�growth�investments��a� moderated�contribution�from�LHH�and�less�non-recurring�benefits�when� compared�to�the�prior�period��
Free�cash�flow��in�the�first�half�of������was�EUR��������This�compares�to� EUR�����in�the�first�six�months of�last�year��and�was�impacted�by� increased�working�capital�needs�to�support�revenue�growth��The� Company�distributed�EUR�����in�dividends�and�completed�the� acquisition�of�AKKA�Technologies��Net�debt��at����June������was�EUR�
�������representing�a�ratio�of����x�net�debt�to�EBITDA��excluding�one- offs�and�on�a�pro-forma�basis�
Variance |
|||
HY����� |
HY����� |
Reported |
Organic |
Summary�of�income�statement�information |
|||||
Revenues |
������ |
������ |
���� |
��� |
|
Gross�profit |
����� |
����� |
���� |
��� |
|
EBITA�excluding�one-offs |
��� |
����� |
-��� |
-��� |
|
EBITA |
��� |
����� |
-��� |
-��� |
|
Net�income�attributable�to�Adecco�Group�shareholders |
��� |
��� |
-��� |
||
Diluted�EPS |
���� |
���� |
-���� |
||
Adjusted�EPS� |
���� |
���� |
-���� |
||
Gross�margin |
����� |
����� |
����bps |
���bps |
|
EBITA�margin�excluding�one-offs |
���� |
���� |
-���bps |
-����bps |
|
EBITA�margin |
���� |
���� |
-����bps |
-����bps |
|
Summary�of�cash�flow�and�net�debt�information |
|||||
Free�cash�flow�before�interest�and�tax�paid��FCFBIT� |
� |
��� |
|||
Free�cash�flow��FCF� |
����� |
��� |
|||
Net�debt |
����� |
��� |
|||
Days�sales�outstanding |
�� |
�� |
|||
Cash�conversion� |
��� |
��� |
|||
Net�debt�to�EBITDA�excluding�one-offs |
���x |
���x |
|||
� |
Organic�growth�is�a�non-US�GAAP�measure�and�excludes�the�impact�of�currency��acquisitions�and�divestitures� |
||||
� |
In�the�first�six�months�of�������SG&A�included�one-offs�of�EUR����in�restructuring�and�acquisition�related�costs� |
||||
� |
EBITA�is�a�non-US�GAAP�measure�and�refers�to�operating�income�before�amortisation�and�impairment�of�goodwill�and�intangible�assets� |
||||
� |
Free�cash�flow�is�a�non-US�GAAP�measure�and�comprises�cash�flows�from�operating�activities�less�capital�expenditures� |
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� |
Net�debt�is�a�non-US�GAAP�measure�and�comprises�short-term�and�long-term�debt�less�cash�and�cash�equivalents�and�short-term�investments� |
- Net�debt�to�EBITDA�is�a�non-US�GAAP�measure�and�is�calculated�as�net�debt�at�period�end�divided�by�the�last�four�quarters�of�EBITA�excluding�one-offs�plus�depreciation��
- Adjusted�EPS�is�a�non-US�GAAP�measure�and�refers�to�Net�income�attributable�to�Adecco�Group�shareholders�before�amortisation�and�impairment�of�goodwill�and�intangible�assets��excluding�one-off�costs�and�exceptional�tax�items��divided�by�basic�weighted-average�shares�outstanding�
- Cash�conversion�is�a�non-US�GAAP�measure�and�is�calculated�as�the�last�four�quarters�of�FCFBIT�divided�by�the�last�four�quarters�of�EBITA�excluding�one-offs�
2 |
2022 Half Year Report |
O P E R A T I N G A N D F I N A N C I A L R E V I E W ( C O N T I N U E D )
in millions, except share and per share information
Group�performance�overview
Statements�throughout�this�operating�and�financial�review�using�the� term�"the�Company"�refer�to�the�Adecco�Group��which�comprises� Adecco�Group�AG��a�Swiss�corporation��its�consolidated�subsidiaries�� as well�as�variable�interest�entities�for�which�the�Adecco�Group�is� considered�the�primary�beneficiary�
Revenues�
In�the�first�half�of�������revenues�of�EUR��������were�up�����year-on- year�on�a�reported�basis��Currency�movements�had�a�positive�impact�on� revenues�of�approximately����and�M&A�had�a�positive�impact�of� approximately�����while�the�number�of�working�days�impact�was� negligible��Revenue�growth�was�therefore����on�an�organic�and�trading� days�adjusted�basis�
By�Global�Business�Unit��GBU���revenues�in�Adecco�were�up�����up����
in�LHH�and�����in�Akkodis��all�compared�to�the�prior�year�on�an�organic� and�trading�days�adjusted�basis�
By�service�line��Flexible�Placement�revenues�were�up����year-on-year� organically��at�EUR��������Permanent�Placement�revenues�grew�by�����
to�EUR������revenues�from�Career�Transition�were�EUR������down�
�����revenues�in�Training��Upskilling�&�Reskilling�were�up�����to�EUR�
�����and�Outsourcing��Consulting�&�Other�Services�revenues�were�EUR�
�������up�����
Selling��general��and�administrative�expenses��SG&A��
SG&A�excluding�one-offs�was�EUR�������in�the�first�half�of�����������
higher�organically�compared�to�the�prior�year��SG&A�excluding�one-offs� as�a�percentage�of�revenues�was��������compared�to�������in�the� previous�year��Currency�movements�had�a�negative�impact�on�SG&A�of� approximately�����Reported�SG&A�was�EUR��������FTE�employees� increased�by�����organically�year-on-year��Compared�to�the�first�half�of�
������the�branch�network�organic�increase�was�negligible�
In�the�first�half�of�������one-off�costs�amounted�to�EUR�����These� included�restructuring�and�acquisition�related�costs�of��EUR����in� Corporate�Holding��mainly�related�to�the�AKKA�integration��EUR����in� LHH��EUR���in�Akkodis��EUR�����in�Adecco�DACH��and�EUR���in�Adecco� Americas��
Compensation�expenses�were�EUR�������in�the�first�half�of�������
compared�to�EUR�������in�the�same�period�of�������and�represented�
����of�total�SG&A��Marketing�expenses�were�EUR�����compared�to� EUR����in�the�first�half�of�������Bad�debt�expense�amounted�to�EUR���
in�the�first�half�of�������compared�to�EUR���in�previous�year�
SG&A�breakdown
HY�����
Gross�profit
Gross�profit�amounted�to�EUR�������in�the�first�half�of�������
up�����on�a�reported�basis�and�up����organically��The�gross�margin�was�
�����������bps�above�H��������Compared�to�the�prior�year��currency� increased�gross�margin�by����bps��while�M&A��primarily�the�acquisition� of�AKKA��had�a�positive�impact�of����bps��
On�an�organic�basis��the�gross�margin�was�up����bps��reflecting� expansion�of�����bps�in�Permanent�Placement�and����bps�in�Flexible� Placement��countered�by�Career�Transition��which�was����bps�lower�
Gross�margin�drivers�YoY
in�basis�points |
HY����� |
HY����� |
Flexible�Placement |
�� |
��� |
Permanent�Placement |
��� |
�� |
Career�Transition |
���� |
���� |
Other |
� |
�� |
Organic |
�� |
��� |
Acquisitions�and�divestments |
�� |
�� |
Currency� |
�� |
���� |
Reported |
��� |
��� |
F |
G |
A |
|
DE |
|||
F |
G |
||
C |
E |
||
B CD |
|||
B |
A
ACompensation expenses - 73%
Compensationexpenses
BPremisesPremisesexpensesexpenses- 6%
COfficeOffice& administrative&administrativeexpenses - 6%
- expenses
D Depreciation - 3%
DDepreciation
E Marketing - 3%
E Marketing
F Bad debt expense - 0%
F Baddebtexpense
GOtherOther- 9%
3 |
2022 Half Year Report |
O P E R A T I N G A N D F I N A N C I A L R E V I E W ( C O N T I N U E D )
in millions, except share and per share information
EBITA |
Cash�flow�statement�and�net�debt� |
EBITA�excluding�one-offs�was�EUR�����in�the�first�half�of�������
down�����on�a�reported�basis�year-on-year��and�down�����organically��The�EBITA�margin�excluding�one-offs�was�������down����bps�year-on- year�on�a�reported�basis�and�down�����bps�organically��
The�EBITA�conversion�ratio�excluding�one-offs��EBITA�excluding�one-offs�divided�by�gross�profit��was�������in�the�first�half�of������
compared�to�������in�the�prior�period��
Analysis�of�cash�flow�statements
The�following�table�illustrates�cash�flows�from�or�used�in�operating�� investing��and�financing�activities�
in�EUR |
HY����� |
HY����� |
Summary�of�cash�flow�information
One-offs�amounted�to�EUR���� |
in�the�first�half�of������ |
and�EUR����in� |
Cash�flows�from/�used�in��operating� |
���� |
��� |
|||||||||||||
the�prior�period��EBITA�was�EUR����� |
in�the�first�half�of������ |
compared� |
activities� |
|||||||||||||||
to�EUR����� |
in�the�prior�period��a�decrease�of����� |
reported�and����� |
Cash�used�in�investing�activities� |
������� |
���� |
|||||||||||||
organically��The�EBITA�margin�was������ |
in�the�first�half�of������ |
versus� |
Cash�used�in�financing�activities� |
������� |
����� |
|||||||||||||
�����in�the�prior�period� |
||||||||||||||||||
Cash�flows�from�operating�activities�decreased�to�EUR������ |
in�the�first� |
|||||||||||||||||
Amortisation�of�intangible�assets� |
||||||||||||||||||
half�of������ |
from�EUR����� |
in�the�same�period�of������� |
with�the� |
|||||||||||||||
Amortisation�of�intangible�assets�was�EUR���� |
versus�EUR���� |
decrease�driven�by�less�favourable�net�working�capital�and�lower�Net� |
||||||||||||||||
in�H�������� |
income��due�to�the�aforementioned�performance�drivers��DSO�was���� |
|||||||||||||||||
Operating�income� |
days�for�the�first�half�of������ |
and���� |
days�in�the�first�half�of������� |
|||||||||||||||
Cash�used�in�investing�activities�totalled�EUR������� |
compared�to�EUR |
|||||||||||||||||
Operating�income�was�EUR����� |
in�the�first�half�of������ |
and�EUR |
||||||||||||||||
in�the�first�half�of������������ |
cash�outflow�has�been�mainly�driven�by� |
|||||||||||||||||
in�the�first�half�of |
||||||||||||||||||
the�acquisition�of�AKKA EUR�������� |
net�of�cash�and�restricted�cash� |
|||||||||||||||||
Interest�expense�and�other�income/�expenses��� |
net� |
acquired��� |
Capital�expenditures�amounted�to�EUR����in�the�first�half�of� |
|||||||||||||||
Interest�expense�was�EUR���� |
in�the�first�half�of������ |
compared� |
�����and�EUR���� |
in�the�same�period�of������ |
||||||||||||||
Cash�used�in�financing�activities�totalled�EUR�������� |
compared�to�EUR� |
|||||||||||||||||
to�EUR���� |
in�the�first�half�of������� |
Other�income/�expenses |
||||||||||||||||
����in�the�prior�period�and�is�mainly�driven�by�the�acquisition�of�AKKA�in� |
||||||||||||||||||
net�includes�interest�income foreign�exchange�gains�and�losses |
||||||||||||||||||
������In�the�first�half�of������� |
the�net�decrease�of�short-term�debt� |
|||||||||||||||||
proportionate�net�income�of�investee�companies and�other� |
||||||||||||||||||
totalled�EUR����� |
whereas in�the�same�period�of������� |
the�net�decrease� |
||||||||||||||||
non-operating�income/�expenses net In�the�first�half�of������� |
other� |
|||||||||||||||||
of�short-term�debt�totalled�EUR���� |
The�Company�paid�dividends�of�EUR� |
|||||||||||||||||
income/�expenses net�amounted�to�an�expense�of�EUR���� |
compared� |
|||||||||||||||||
����and�EUR����� |
in�the�first�half�of������ |
and�the�first�half�of |
||||||||||||||||
to�an�expense�of�EUR��� |
in�the�same�period�of |
|||||||||||||||||
respectively In������� |
the�Company�repaid�long-term�debt�for�EUR |
|||||||||||||||||
Provision�for�income�taxes |
||||||||||||||||||
and�purchased�treasury�shares�for�EUR���� |
in�H�������� |
|||||||||||||||||
Provision�for�income�taxes�was�EUR���� |
in�the�first�half�of������ |
Net�debt� |
||||||||||||||||
compared�to�EUR����� |
in�the�first�half�of������� |
The�effective�tax�rate� |
||||||||||||||||
Net�debt�was�EUR������� |
as�of���� |
June������� |
compared�to�EUR |
|||||||||||||||
is�impacted�by�recurring�items such�as�tax�rates�in�the�different� |
||||||||||||||||||
as�of����December������� |
The�increase�in�net�debt�reflected�the�usual� |
|||||||||||||||||
jurisdictions�where�the�Company�operates and�the�income�mix�within� |
||||||||||||||||||
seasonal�trends�and�was�impacted�by�acquiring�full�control�of�AKKA� |
||||||||||||||||||
jurisdictions It�is�also�affected�by�discrete�items�which�may�occur�in� |
||||||||||||||||||
Technologies�as�well�as�the�payment�of�the�dividend�in�April������� |
At� |
|||||||||||||||||
any�given�year but�are�not�consistent�from�year�to�year In�the�first�half� |
||||||||||||||||||
���June������� |
the�ratio�of�net�debt�to�EBITDA�excluding�one-offs�on�a� |
|||||||||||||||||
of������� |
the�effective�tax�rate�was������ |
Discrete�events�decreased� |
||||||||||||||||
pro-forma�basis�was x compared�to���� |
x�at���� |
December������� |
The� |
|||||||||||||||
the�effective�tax�rate�by�approximately����� |
In�the�first�half�of |
|||||||||||||||||
following�table�presents�the�calculation�of�net�debt�based�upon�financial� |
||||||||||||||||||
the�effective�tax�rate�was����� |
with�only�minimal�impact�from� |
|||||||||||||||||
measures�in�accordance�with�US�GAAP� |
||||||||||||||||||
discrete�events |
||||||||||||||||||
Net�income�attributable�to�Adecco�Group�shareholders� |
in�EUR |
���June |
���December |
|||||||||||||||
���� |
���� |
|||||||||||||||||
and�EPS |
Net�debt |
|||||||||||||||||
Net�income�attributable�to�Adecco�Group�shareholders�was�EUR����� |
||||||||||||||||||
in�the�first�half�of������� |
compared�to�EUR����� |
in�the�prior�period��Basic� |
Short-term�debt�and�current�maturities� |
|||||||||||||||
earnings�per�share�was�EUR������ |
in�the�first�half�of������ |
compared�to� |
of�long-term�debt |
��� |
��� |
|||||||||||||
EUR������ |
in�the�first�half�of������� |
Adjusted�earnings�per�share�was�EUR� |
Long-term�debt less�current�maturities� |
����� |
����� |
|||||||||||||
�����in�the�first�half�of |
compared�to�EUR |
in�the�prior�year� |
||||||||||||||||
Total�debt |
����� |
����� |
||||||||||||||||
period� |
||||||||||||||||||
Less�� |
||||||||||||||||||
Cash�and�cash�equivalents |
��� |
����� |
||||||||||||||||
Short-term�investments |
||||||||||||||||||
Net�debt |
����� |
�� |
||||||||||||||||
4 |
2022 Half Year Report |
Attachments
Disclaimer
Adecco Group AG published this content on 04 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2022 04:49:10 UTC.