Company Reports

Adecco saw organic revenue expand by 5.6% year over year, gaining 60 basis points of market share. However, positives were offset by weaker expansion in its higher-margin areas, such as permanent placement and LHH.

Adecco saw organic revenues expand by 5.3% year over year, gaining 365 basis points of market share. However, gross profit margin fell 60 basis points versus the first quarter of 2025, and management expects gross margins to be marginally lower sequentially. Shares are down 11% intraday May 13.

Adecco is in the human resources services industry, with the majority of its revenue from the temporary and permanent placement of talent. The staffing industry is highly fragmented. Adecco is one of three global recruitment firms, along with Randstad and Manpower; they each have roughly a 5% market share. They all struggle to differentiate their services, their client networks, and their talent—all averaging gross and EBIT margins of approximately 20% and 3%, respectively, over the past decade.

Weak European hiring demand and the lack of a turnaround from indicators such as the purchasing managers index have led us to lower our short-term revenue and margin forecasts for Randstad's and Adecco's hiring segments.

Adecco is in the human resources services industry, with the majority of its revenue from the temporary and permanent placement of talent. The staffing industry is highly fragmented. Adecco is one of three global recruitment firms, along with Randstad and Manpower; they each have roughly a 5% market share. They all struggle to differentiate their services, their client networks, and their talent—all averaging gross and EBIT margins of approximately 20% and 3%, respectively, over the past decade.

Positive momentum in hiring demand, as seen in Adecco's third straight quarter of organic revenue and EBITA margin growth, supports our belief that macroeconomic weakness is subsiding.

Adecco is in the human resources services industry, with the majority of its revenue from the temporary and permanent placement of talent. The staffing industry is highly fragmented. Adecco is one of three global recruitment firms, along with Randstad and Manpower, that each have roughly a 5% market share. They all struggle to differentiate their services, their client networks, and their talent—all averaging gross and EBIT margins of approximately 20% and 3%, respectively, over the past decade.

Organic revenue growth and EBITA margin, excluding one-offs, increased for the third straight quarter to 3.9% and 3.8%, respectively, but remained flat for the full year.

Adecco is in the human resources services industry, with the majority of its revenue from the temporary and permanent placement of talent. The staffing industry is highly fragmented. Adecco is one of three global recruitment firms, along with Randstad and Manpower, that each have roughly a 5% market share. They all struggle to differentiate their services, their client networks, and their talent—all averaging gross and EBIT margins of approximately 20% and 3%, respectively, over the past decade.

Adecco presented its midterm strategy, which will focus on AI and its digital platform. It plans to reduce leverage to below 1.5 times by 2027, from 3.0 times as of the third-quarter-end, which has increased investor concern about a dividend cut. Both contributed to a 10% decline in stock price.

Adecco reported third-quarter revenue growth of 3.4%, driven by a 20% turnaround in the Americas and a return to growth in EMEA, excluding France. All in all, the group saw a 300-basis-point improvement in market share. Improving top-line growth was complemented by improving margins.

Adecco reported second-quarter revenue growth of 0.4%, driven by a 14% turnaround in the Americas and a 9% increase in Asia-Pacific, respectively. Improving top-line growth was offset by continued poor margin performance, driven by weakened organic growth margins.

We are launching coverage of Adecco, one of the three leading staffing industry companies, alongside Randstad and Manpower. The majority of its revenue is from the temporary and permanent placement of talent to its clients.

Adecco is in the human resources services industry, with the majority of its revenue from the temporary and permanent placement of talent. The staffing industry is highly fragmented. Adecco is one of three global recruitment firms, along with Randstad and Manpower, that each have roughly a 5% market share. They all struggle to differentiate their services, network of clients, and talent—all averaging gross and EBIT margins of approximately 20% and 3%, respectively, over the past decade.

We are dropping coverage of Adecco. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

In a highly fragmented industry, Adecco stands out as the largest of only three diversified global recruitment providers. With a presence in almost 60 countries, Adecco has the ability to service global contracts, which are centrally managed from the company’s headquarters in Zurich, while also being able to effectively service small to midsize enterprises, or SMEs, through its strong local branch network.

In any normal scenario investors would be happy if you offered them organic revenue growth of 4% against tough comparables. Although operating margins fell year over year, this was down to reinvestment in the business, with Adecco cutting back significantly in 2020. Investor disappointment, exemplified in the Aug. 4 share price move, is due to the negative comparison with peer Randstad, which reported revenue growth that was more than twice the level of Adecco, against an even more difficult comparable number. Again, this comes down to the stance that Randstad took in investing earlier and benefiting to a larger degree from the recovery. However, we believe this trend will rectify itself in coming quarters, as Adecco eventually makes up for lost time. With its share price trading at a significant discount to peers, and to our CHF 63 fair value estimate, we believe this is currently the best way to play the sector.

Recruitment giant Adecco started off 2022 in a good fashion, with organic revenue growth of 5%, and the strong momentum from 2021 continuing into the new year. Despite the gloomy macroeconomic outlook, demand for talent appears to be holding up just fine, with permanent placements, a key indicator of the strength of the economy, rising 60% year over year. Adecco is our favored way to play the recruitment sector currently, and our CHF 63 fair value estimate offers attractive upside potential from the prevailing share price.

In a highly fragmented industry, Adecco stands out as the largest of only three diversified global recruitment providers. With a presence in almost 60 countries, Adecco has the ability to service global contracts, which are centrally managed from the company’s headquarters in Zurich, while also being able to effectively service small to midsize enterprises, or SMEs, through its strong local branch network.

Recruitment leader Adecco didn’t quite recover all the ground lost during the pandemic, but it made some solid headway over the course of 2021, with organic revenues up 9%, and operating margins up 100 basis points, putting it firmly back on track. While peer Randstad invested early and positioned itself for a swift recovery, Adecco was slightly slower to the ball. That being said, we believe the firm is in a strong position to push on from here, with the company having recruited materially over the year, with full time employees up 8% year over year. We don’t expect to make any material adjustments to our numbers on the back of this update, and reiterate our EUR 63 fair value estimate. We see attractive upside potential from here.