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Adecco Group AG (AHEXY)
OTHER OTC:AHEXY
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Adecco Group AG
(OTC:AHEXY)
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Rating:60Neutral
Price Target:
$14.50
â–¼(-1.16% Downside)
Action:DowngradedDate:02/28/26
The score is driven primarily by steady underlying financial performance supported by solid cash generation, and a constructive earnings-call backdrop focused on market-share gains, productivity, and deleveraging. These positives are tempered by a weaker technical trend (below key moving averages with negative MACD) and only moderate growth/margin pressure, while reasonable valuation and a strong dividend provide support.
Positive Factors
Sustained market share gains
Consistent multi-quarter market share gains indicate durable competitive positioning and execution across geographies. Sustained share capture helps stabilize pricing power, client relationships and scale benefits, supporting medium-term revenue resilience even if overall staffing demand softens.
Strong cash generation and deleveraging
High cash conversion and sizable free cash flow give management flexibility to invest, pay dividends and reduce leverage. Observable deleveraging and a clear net-debt/EBITDA target through 2027 support financial resilience and lower refinancing risk across staffing cycles.
Strategic healthcare staffing acquisition
Buying a specialized U.S. healthcare staffing business strengthens exposure to a durable, high-margin talent segment and scales platform capabilities. This structural move diversifies revenue mix, deepens client relationships, and leverages technology/clinician networks for longer-term competitive advantage.
Negative Factors
Thin and compressed margins
Profitability remains modest and below prior peaks, leaving limited buffer for cost shocks or pricing pressure. Thin margins constrain free cash flow upside and make returns more sensitive to volume swings, reducing margin sustainability across cyclical staffing demand.
Moderate leverage and slower-than-desired reduction
Debt roughly equal to equity and a net-debt/EBITDA around 2.4x limit financial flexibility. If revenue or margins deteriorate, servicing and refinancing risks rise and planned growth or M&A could be constrained until leverage targets are met.
Soft top-line and regional/segment pockets of weakness
Modest aggregate revenue growth despite share gains signals demand softness in several segments and regions. Dependence on large-account wins and uneven geographic recovery can make growth lumpy and limit sustainable revenue momentum over the medium term.
Adecco Group AG (AHEXY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.44B
Dividend Yield4.22%
Average Volume (3M)413.00
Price to Earnings (P/E)29.4
Beta (1Y)0.27
Revenue Growth-2.35%
EPS Growth-3.74%
CountryUS
Employees33,597
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.45
Shares Outstanding336,853,120
10 Day Avg. Volume290
30 Day Avg. Volume413
Financial Highlights & Ratios
PEG Ratio-0.56
Price to Book (P/B)2.44
Price to Sales (P/S)0.37
P/FCF Ratio17.83
Enterprise Value/Market Cap1.58
Enterprise Value/Revenue0.30
Enterprise Value/Gross Profit1.59
Enterprise Value/Ebitda9.24
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.6
Revenue Forecast (FY)$27.64B
Adecco Group AG Business Overview & Revenue Model
Company DescriptionAdecco Group AG, together with its subsidiaries, provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa. It offers flexible placement, permanent placement, outsourcing, training, upskilling and reskilling, career transition and workforce transformation, technology consulting and talent, tech academy, digital staffing services, and talent advisory and solutions under the Adecco, Adia, General Assembly, Badenoch + Clark, LHH, pontoon, Spring, and Modis. The company also operates Hired, a talent recruitment platform. As of December 31, 2021, it operated approximately 4,300 branches in 59 countries and territories. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is based in Zurich, Switzerland.
How the Company Makes MoneyAdecco Group AG generates revenue primarily through fees charged for its staffing services. The company earns money by placing temporary and permanent personnel in client organizations, receiving a fee that typically comprises a markup on the wages of the workers supplied. Key revenue streams include temporary staffing, where clients pay for labor on an hourly basis, and permanent placement services, which involve a one-time fee for successfully placing candidates. Additionally, Adecco offers recruitment process outsourcing (RPO) and managed services provider (MSP) solutions, which are also significant contributors to its earnings. The company has established partnerships with various corporations and public sector organizations, enhancing its ability to provide tailored workforce solutions. Factors such as labor market conditions, demand for skilled labor, and economic trends play crucial roles in influencing Adecco's financial performance.
Adecco Group AG Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call emphasized multiple operational and financial improvements—market share gains, improved Q4 revenue and margins, strong productivity, robust cash generation and measurable deleveraging—supported by targeted turnarounds (e.g., Akkodis Germany) and strong performance in North America, LHH and outsourcing services. Challenges include modest full‑year revenue growth, localized weakness (Akkodis Germany, permanent placement, some country-specific softness), one-off restructuring charges and early-stage AI scaling risks. Overall, the positive operational momentum, cash flow strength and clear deleveraging pathway outweigh the headwinds.Q4-2025 Updates
Positive Updates
Market Share Gains
The group gained significant market share—245 basis points vs. key competitors on a full-year basis and 395 basis points in Q4—indicating consistent outperformance across the past three years and strong competitive momentum.
Improved Q4 Top-line and Margins
Q4 revenues reached EUR 6.0 billion, up 3.9% year-on-year. Gross profit grew 4% to EUR 1.1 billion with a healthy 19.1% margin (stable organically). Q4 EBITA was EUR 225 million, up 20% with a 3.8% margin (+60 bps YoY).
Full-Year Profitability and Cost Discipline
Full-year EBITA of EUR 693 million with a 3.0% EBITA margin (within target corridor). G&A overheads were reduced by EUR 23 million in 2025, delivering nearly EUR 200 million of net savings vs. 2022. SG&A excluding one-offs improved to 15.4% of revenues (-70 bps).
Strong Cash Generation and Deleveraging
Full-year operating cash flow of EUR 613 million and free cash flow of EUR 483 million. Cash conversion ratio was 102%. Net debt fell by EUR 186 million to EUR 2.29 billion and net debt-to-EBITDA improved to 2.4x (down 0.2x YoY and 0.6x sequentially).
Productivity and Operating Leverage Gains
Group productivity rose 11% in Q4 (3% YoY on full year). Drop-down ratio exceeded 80% in Q4, and business-wide productivity improvements plus G&A discipline contributed to a 50 bps positive impact from operating leverage on EBITA.
Regional & Segment Outperformance — Americas and Adecco GBU
Adecco GBU revenues were EUR 4.8 billion, up 4.9% with outsourcing up 14% and MSP up 6%. Adecco Americas delivered 21% revenue growth (North America +23%, Latin America +19%) and expanded EBITA margin by 150 bps.
LHH and New Services Momentum
LHH revenues up 2% with Coaching & Skilling +27%; Ezra platform revenue surged 68% and General Assembly B2B grew 31%. LHH EBITA margin reached 9.7% (+510 bps YoY; +230 bps underlying), reflecting profitable mix and 12% productivity improvement.
Akkodis Germany Turnaround Progress
Restructuring in Akkodis Germany locked in EUR 58 million of annual run-rate savings (EUR 43m cost-of-sales, EUR 15m SG&A, EUR 8m real estate). The unit reached a 5.4% EBITA margin run rate at year-end and is expected to deliver incremental P&L benefits in 2026.
Shareholder Remuneration and Optional Scrip Dividend
Board proposes a dividend of CHF 1.00 per share (46% payout ratio within 40–50% policy) with option for shareholders to receive cash or newly issued shares, balancing shareholder return and cash retention for deleveraging/growth.
Negative Updates
Modest Full-Year Revenue Growth
Full-year revenues increased only 1.3% year-on-year, indicating relatively slow top-line expansion despite market-share gains and quarter-to-quarter improvements.
Akkodis Revenue Weakness and One-Off Charges
Akkodis revenues were down 1% for the year (Germany -7%). The Germany restructuring incurred EUR 46 million of one-off charges in 2025, and total one-offs for the year were around EUR 60 million (guidance for 2026 one-offs reduced to ~EUR 40 million).
Permanent Placement and Select Market Softness
Permanent placement declined 6% within Adecco; Adecco France revenues were down 2% and U.K. & Ireland down 1%, with logistics and public sector weakness cited. Australia (APAC) revenues fell 10% amid a tough market.
Gross Margin Pressures in Flexible Placement and FX Headwinds
Flexible placement exerted a modest headwind to gross margin (-20 bps YoY) and permanent placement also pressured margins (-10 bps). FX contributed ~10–20 bps negative impact in certain comparisons and timing of FESCO income created quarter-to-quarter variability.
Concentration Risk in Large-Account Growth
North America growth was strong (Q4 +23%) but partly driven by large client wins; management notes SMEs are growing more slowly and require targeted initiatives, implying potential normalization as large-account gains anniversary.
Residual Uncertainty Around AI Impact and Scaling
While AI initiatives show productivity and fill-rate benefits, management cautioned the impact is early-stage and needs scaling; broader macro/tech-driven job displacement risks remain uncertain even if not material to date.
Company Guidance
Guidance: management expects Q1 gross margin and SG&A (ex one‑offs) to be broadly stable sequentially (despite a ~20 bps FX headwind versus prior year and normal Q1 seasonality that typically raises SG&A by ~EUR 10–15m), reminded that H1 is a working‑capital outflow versus H2 inflows, and flagged FESCO timing differences versus last year; one‑offs are expected to fall to about EUR 40m in 2026 (vs ~EUR 60m in 2025). The board proposes a CHF 1.00/share dividend (46% payout) with a cash-or-scrip option, refinancing of the hybrid is underway, and the group reiterated its target to reduce net debt/EBITDA to ≤1.5x by end‑2027 (building on year‑end 2.4x, down 0.2x y/y and 0.6x q/q) while maintaining strong cash generation (LTM cash conversion 102%, FY operating cash flow EUR 613m, FCF EUR 483m; Q4 OpCF EUR 476m, capex EUR 50m, net debt EUR 2.29bn, DSO 51.8 days).Adecco Group AG Financial Statement Overview
Summary
Financials are steady but not accelerating: profitability remains positive with thin margins and recent revenue/margin softening, while leverage is moderate and has not materially declined. Cash generation is a relative strength with consistently positive operating cash flow and solid free cash flow, though free cash flow fell in 2025 versus 2024.Income Statement
Adecco remains profitable on an annual basis, but performance has softened. Revenue has drifted down from 2023–2025 (2025 down ~3.6% year over year), and profitability has compressed versus earlier years: net margin is ~1.3% in 2024–2025 versus ~2.8% in 2021. Operating profitability is steady but thin for the industry (EBIT margin ~2.2–2.4% in 2023–2025). The company has shown it can rebound from downturns (2020 loss to strong 2021), but the recent trajectory points to slowing demand and limited pricing/margin cushion.56
Neutral
Balance Sheet
Leverage is moderate with debt roughly in line with equity (debt-to-equity ~1.0 in 2023–2025), and equity remains sizable relative to the asset base. Returns on equity are positive and fairly stable recently (~8–9% in 2022–2025), though well below the peak level seen in 2021. The key watch item is that leverage has not meaningfully come down while earnings and revenue have eased, which can reduce flexibility if the staffing cycle weakens further.60
Neutral
Cash Flow
Cash generation is a relative strength: operating cash flow has been consistently positive, and free cash flow remains solid (roughly $464M in 2025 after ~$563M in 2024). Free cash flow covers a large portion of earnings (about 0.79x net income in 2025 and ~0.80x in 2024), supporting earnings quality. However, free cash flow growth turned negative in 2025 and operating cash flow is modest relative to revenue, suggesting working-capital swings and a less supportive cash backdrop versus the prior year.63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 22.17B | 23.14B | 23.96B | 23.64B | 20.95B |
| Gross Profit | 4.19B | 4.50B | 4.97B | 4.97B | 4.28B |
| EBITDA | 722.32M | 760.00M | 841.00M | 770.00M | 971.00M |
| Net Income | 281.44M | 303.00M | 325.00M | 342.00M | 586.00M |
Balance Sheet | |||||
| Total Assets | 11.75B | 12.10B | 12.43B | 13.26B | 11.87B |
| Cash, Cash Equivalents and Short-Term Investments | 387.83M | 482.00M | 556.00M | 782.00M | 3.05B |
| Total Debt | 3.49B | 3.48B | 3.67B | 3.70B | 3.48B |
| Total Liabilities | 8.36B | 8.51B | 8.83B | 9.36B | 8.06B |
| Stockholders Equity | 3.38B | 3.58B | 3.60B | 3.88B | 3.79B |
Cash Flow | |||||
| Free Cash Flow | 463.94M | 563.00M | 347.00M | 328.00M | 590.00M |
| Operating Cash Flow | 588.81M | 707.00M | 563.00M | 543.00M | 722.00M |
| Investing Cash Flow | -149.84M | -157.00M | -209.00M | -1.45B | -206.00M |
| Financing Cash Flow | -443.77M | -634.00M | -620.00M | -1.38B | 980.00M |
Adecco Group AG Technical Analysis
Negative
14.67
Price Trends
14.28
Negative
14.39
Negative
14.68
Negative
Market Momentum
-0.28
Positive
41.55
Neutral
8.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AHEXY, the sentiment is Negative. The current price of 14.67 is above the 20-day moving average (MA) of 14.02, above the 50-day MA of 14.28, and below the 200-day MA of 14.68, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 41.55 is Neutral, neither overbought nor oversold. The STOCH value of 8.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AHEXY.
Adecco Group AG Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $704.68M | 16.87 | 24.08% | 0.88% | 9.64% | 9.93% | |
71 Outperform | $3.26B | 11.53 | 13.89% | 2.89% | 3.65% | 5.71% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $4.44B | 29.39 | 8.57% | 4.22% | -2.35% | -3.74% | |
59 Neutral | $2.45B | 20.45 | 10.02% | 8.65% | -7.27% | -43.88% | |
51 Neutral | $1.30B | -104.17 | -0.64% | 4.96% | -2.44% | -156.01% | |
43 Neutral | $806.26M | -210.19 | -9.79% | 6.37% | 3.19% | -86.21% |
* Industrials Sector Average
AHEXY
Adecco Group AG
13.47
-1.89
-12.31%
BBSI
Barrett Business Services
29.22
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-25.31%
NSP
Insperity
21.89
-60.91
-73.56%
KFY
Korn Ferry
65.08
1.61
2.54%
MAN
ManpowerGroup
28.70
-30.73
-51.71%
RHI
Robert Half
24.91
-26.26
-51.32%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.