Improving Balance in Growth and Margin Trend During Q2 of 2018
The Adecco Group, a leading workforce solutions provider, has released its Q2 2018 results, highlighting some significant developments and performance indicators.
Net income attributable to the group shareholders for the quarter stood at EUR 170 million. The company's underlying revenue growth was a commendable 4%, reflecting a steady growth trajectory.
In Q2 2018, the EBITA (Operating income before amortisation and impairment of goodwill and intangible assets) included one-off costs totalling EUR 11 million. These costs were primarily due to restructuring (EUR 6 million) and acquisition-related expenses (EUR 5 million).
Gross margin for the quarter remained stable year-on-year at 18.3%. Notably, the growth in North America General Staffing returned in Q2 2018, achieving its strongest performance since Q2 2015. Permanent recruitment also remained strong during the same period.
Alain Dehaze, the Group Chief Executive Officer, led the Adecco Group at the time of the results' release. The company is making strategic investments to digitalize its operations, aiming to strengthen its competitive position.
Interestingly, the sale of the Beeline stake was announced in July, yielding EUR 172 million after-tax cash proceeds. However, no new information about this sale or its impact on the Q2 2018 results was provided in the report.
While no new information about the Group margin trend in the second half of 2018 was provided, the company expects this trend to improve in the coming months. Furthermore, no updates were given regarding the performance of North America General Staffing or permanent recruitment in the same context.
EBITA2 margin excluding one-offs in Q2 2018 was 4.5%, down 30 bps. It's worth noting that both organic growth and revenues in June and July combined were up 4%, organically and trading days adjusted.
Organic growth, like EBITA, is a non-US GAAP measure, excluding the impact of currency, acquisitions, and divestitures. Revenues in June and July combined reflect a positive growth trend, despite not being directly associated with the Q2 2018 results.
In conclusion, the Adecco Group's Q2 2018 results show a steady performance with encouraging growth in certain areas, such as North America General Staffing and permanent recruitment. The company's strategic investments in digitalization are expected to further strengthen its competitive position in the future. However, the impact of one-off costs and the sale of the Beeline stake on the Q2 2018 results is not fully clear from the information provided. The company expects the Group margin trend to improve in the second half of 2018.
