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Adecco Group (AHEXY)
:AHEXY
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Adecco Group AG
(OTC:AHEXY)
Rating:71Outperform
Price Target:
$16.00
▲(8.11%Upside)
Adecco Group AG (AHEXY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.90B
Dividend Yield4.06%
Average Volume (3M)900.00
Price to Earnings (P/E)15.9
Beta (1Y)0.62
Revenue Growth-4.25%
EPS Growth-6.06%
CountryUS
Employees33,597
SectorIndustrials
Sector Strength87
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.27
Shares Outstanding336,853,120
10 Day Avg. Volume2,032
30 Day Avg. Volume900
Financial Highlights & Ratios
PEG Ratio-0.32
Price to Book (P/B)1.32
Price to Sales (P/S)0.00
P/FCF Ratio15.57
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering0
Adecco Group AG Business Overview & Revenue Model
Company DescriptionAdecco Group AG (AHEXY) is a global leader in workforce solutions, headquartered in Zurich, Switzerland. The company operates in sectors such as temporary staffing, permanent placement, career transition, and talent development. Adecco provides a wide range of services including recruitment, consulting, and outsourcing solutions across various industries. With a strong presence in over 60 countries, Adecco connects more than 3.5 million people with job opportunities annually, serving clients ranging from small businesses to multinational corporations.
How the Company Makes MoneyAdecco Group AG primarily generates revenue through its staffing and human resource services. The company earns money by providing temporary and permanent staffing solutions, charging client companies a fee for matching them with skilled workers. Adecco's revenue streams also include outsourcing services, where they manage entire HR processes for businesses, and career transition services, which assist employees during job changes. Key partnerships with businesses across diverse sectors and a global network of branches enhance Adecco's ability to source talent and fulfill client needs, contributing significantly to its earnings.
Adecco Group AG Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 17.18%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with both positive momentum in market share gains, U.S. growth, and strategic wins, yet faced challenges with revenue declines, margin pressure, and regional difficulties in Germany and France.Q1-2025 Updates
Positive Updates
Market Share Gains
The Adecco Group gained further market share with a 30 basis points increase at the group level, on top of the 200 basis points delivered in 2024. The Adecco GBU was 130 basis points ahead of key competitors.
Return to Growth in the U.S.
Adecco U.S. returned to growth with an exit rate of +4% and a significant improvement from -12% in Q4 to -2% in Q1.
AI Adoption and Strategic Wins
The Group launched pre-screening agents in Adecco UK and new capabilities in Akkodis Germany as part of AI initiatives. Significant contract wins in Germany with an IT services provider and in the U.S. with a leading market research company were secured.
Strong APAC and LatAm Growth
Adecco APAC saw revenues up 11%, with Japan, Asia, and India driving growth. Latin America revenues grew 14%, led by Argentina, Colombia, and Brazil.
Negative Updates
Revenue Decline and EBITA Margin Pressure
Revenues were €5.6 billion, 2% lower year-on-year, with a gross margin of 19.4%, which was 40 basis points lower year-on-year. EBITA excluding one-offs was €132 million, with a margin of 2.4%, 40 basis points lower year-on-year.
Challenges in Akkodis Germany
Akkodis' revenues were 8% lower year-on-year, with significant pressure in Germany due to challenges in the auto sector, impacting profitability.
Weak Performance in France
In France, revenues were 9% lower, attributed to market headwinds and impacts from large clients accounting for 350 basis points of the decline.
Negative Cash Flow from Operations
Cash flow from operating activities was negative at minus €144 million, reflecting lower business income and working capital absorption.
Company Guidance
During the Adecco Group's Q1 2025 call, guidance was provided with a focus on various metrics and strategic initiatives. Revenues reached €5.6 billion, reflecting a 2% year-on-year decrease on an organic, trading days-adjusted basis, but a 3% sequential increase. The gross margin was 19.4%, 40 basis points lower year-on-year, while EBITA excluding one-offs was €132 million, resulting in a 2.4% margin. Adjusted EPS fell 20% year-on-year to $0.48. Cash flow from operating activities was negative €144 million, with a cash conversion ratio of 105%. Management emphasized agile capacity management and cost control, aiming to maintain a 3% EBITA margin floor annually. Market share gains were highlighted, with a 30 basis point increase on top of the 200 basis points in 2024. The Group is leveraging AI solutions and strategic partnerships to enhance efficiency and reduce costs, while also focusing on navigating macroeconomic uncertainties and trade policy impacts.Adecco Group AG Financial Statement Overview
Summary
Adecco Group AG demonstrates financial resilience with steady revenues and effective cash management. However, profitability measures have shown signs of pressure, with declining margins and increased leverage. The company must address these challenges to sustain financial health and growth.Income Statement
Adecco Group AG has shown a consistent revenue base over the years with a recent slight decline. The gross profit margin remains stable around 19%, indicating good cost management. However, net profit margins have been under pressure, dropping from 2.5% in 2021 to 1.3% in 2024. The EBIT and EBITDA margins have also decreased, reflecting challenges in maintaining operational efficiency.70
Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio, increasing from 0.70 in 2019 to 0.97 in 2024, suggesting a rising leverage. The equity ratio has decreased slightly, indicating an increased reliance on debt financing. Return on equity has also declined from 18.4% in 2021 to 8.5% in 2024, reflecting reduced profitability on shareholder's equity.65
Positive
Cash Flow
Cash flows remain robust with operating cash flow consistently exceeding net income, showing effective cash management. The free cash flow has shown variability but is generally positive, supporting ongoing operations and investments. However, the free cash flow to net income ratio has decreased, indicating less cash generation relative to earnings.75
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 23.14B | 23.96B | 23.64B | 20.95B | 19.56B |
| Gross Profit | 4.50B | 4.97B | 4.97B | 4.28B | 3.79B |
| EBITDA | 760.00M | 841.00M | 770.00M | 971.00M | 307.00M |
| Net Income | 303.00M | 325.00M | 342.00M | 586.00M | -97.00M |
Balance Sheet | |||||
| Total Assets | 12.10B | 12.43B | 13.26B | 11.87B | 9.79B |
| Cash, Cash Equivalents and Short-Term Investments | 482.00M | 556.00M | 782.00M | 3.05B | 1.49B |
| Total Debt | 3.48B | 3.67B | 3.70B | 3.48B | 2.29B |
| Total Liabilities | 8.51B | 8.83B | 9.36B | 8.06B | 6.57B |
| Stockholders Equity | 3.58B | 3.60B | 3.88B | 3.79B | 3.21B |
Cash Flow | |||||
| Free Cash Flow | 563.00M | 347.00M | 328.00M | 590.00M | 563.00M |
| Operating Cash Flow | 707.00M | 563.00M | 543.00M | 722.00M | 720.00M |
| Investing Cash Flow | -157.00M | -209.00M | -1.45B | -206.00M | -162.00M |
| Financing Cash Flow | -634.00M | -620.00M | -1.38B | 980.00M | -290.00M |
Adecco Group AG Technical Analysis
Positive
14.80
Price Trends
13.80
Positive
13.71
Positive
13.77
Positive
Market Momentum
0.16
Negative
58.78
Neutral
74.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AHEXY, the sentiment is Positive. The current price of 14.8 is above the 20-day moving average (MA) of 14.15, above the 50-day MA of 13.80, and above the 200-day MA of 13.77, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 58.78 is Neutral, neither overbought nor oversold. The STOCH value of 74.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AHEXY.
Adecco Group AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (71)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.77B | 15.87 | 13.49% | 2.63% | -3.27% | 62.57% | |
71 Outperform | $4.90B | 15.92 | 7.98% | 4.06% | -4.25% | -6.06% | |
71 Outperform | ¥255.65B | 12.95 | 8.49% | 3.09% | 6.31% | 12.94% | |
63 Neutral | $3.52B | 21.68 | 162.14% | 1.51% | 1.50% | -44.95% | |
61 Neutral | $4.22B | 20.63 | 14.49% | 5.71% | -7.81% | -40.22% | |
57 Neutral | $1.87B | 17.55 | 5.19% | 3.56% | -5.52% | 133.51% | |
54 Neutral | $2.23B | 35.85 | 48.65% | 4.05% | 1.90% | -60.33% |
* Industrials Sector Average
Performance Comparison
AHEXY
Adecco Group AG
14.80
-1.47
-9.04%
NSP
Insperity
59.26
-28.07
-32.14%
KFY
Korn Ferry
73.01
7.97
12.25%
MAN
ManpowerGroup
40.47
-26.15
-39.25%
RHI
Robert Half
41.32
-19.93
-32.54%
TNET
TriNet Group
72.67
-25.56
-26.02%
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.