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Adecco Group AG (CH:ADEN)
:ADEN
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Adecco Group AG
(ADEN)
Rating:71Outperform
Price Target:
CHF28.00
â–²(7.12% Upside)
Positive Factors
Contract Wins
Adecco's successful contract wins in key markets like the US contribute to its improved performance.
Geographical Growth
North America has now returned to growth with an exit growth rate of +4%.
Market Share
Adecco is gaining share in construction and has won several contracts in 4Q24.
Negative Factors
Customer Decline
Adecco suffered disproportionately because of lower volumes, with their 3 largest customers facing structural decline.
Macroeconomic Uncertainty
Ongoing macroeconomic uncertainty, like potential impacts from US tariffs and EU cyclical recovery, poses a challenge for Adecco in the near term.
Project Cancellations
Projects with auto OEM are being stopped, delayed or cancelled, which is putting pressure on volume, utilization rate, and margins.
Adecco Group AG (ADEN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF4.40B
Dividend Yield3.81%
Average Volume (3M)662.76K
Price to Earnings (P/E)16.2
Beta (1Y)1.23
Revenue Growth-4.68%
EPS Growth-5.79%
CountryCH
Employees33,597
SectorServices
Sector StrengthN/A
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.43
Shares Outstanding168,426,560
10 Day Avg. Volume662,471
30 Day Avg. Volume662,758
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF30.22Price Target Upside15.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Adecco Group AG Business Overview & Revenue Model
Company DescriptionAdecco Group AG is a leading global workforce solutions provider, headquartered in Zurich, Switzerland. The company operates in the staffing and recruitment sector, offering a wide range of services that include temporary staffing, permanent placement, career transition, and talent development. Adecco serves various industries, including IT, engineering, finance, and healthcare, leveraging its extensive network to connect employers with skilled workers. The company's core products encompass recruitment services, employee training programs, and outsourcing solutions, positioning it as a crucial player in the labor market.
How the Company Makes MoneyAdecco Group AG generates revenue primarily through its staffing and recruitment services. The company charges clients a fee based on a percentage of the employee's salary or a fixed amount for placing candidates in temporary or permanent roles. Key revenue streams include temporary staffing services, which account for a significant portion of earnings, as well as permanent placements and outsourcing services. Additionally, Adecco offers consulting services related to workforce management and employee training, further diversifying its income sources. Strategic partnerships with various organizations enhance its service offerings, while economic factors and labor market trends significantly impact its earnings.
Adecco Group AG Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: 4.81%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable revenue growth and market share gains, particularly in Americas and APAC. However, challenges in Akkodis Germany, pressure on gross margins, and a decline in Permanent Placement revenues highlight ongoing challenges. While there is positive momentum in key areas, significant hurdles remain.Q2-2025 Updates
Positive Updates
Revenue Growth and Market Share Gains
Adecco Group increased market share by 205 basis points, with revenues up 2% year-on-year, led by Adecco Americas (14% growth) and Adecco APAC (9% growth).
Strong Cash Flow Management
Operating cash flow was EUR 81 million, with a cash conversion rate of 98%, driven by disciplined working capital management.
Key Client Wins
Adecco secured significant contracts in EV battery production, a global consulting firm, and a French defense company, showcasing commercial excellence and digital expertise.
Improved Performance in Adecco France
Revenues in France improved from -9% in Q1 to -4% in Q2, outperforming the market with strong sectors like food and beverage, retail, and construction.
Ezra Division Success
Ezra's revenues increased by 39%, reaching a new record level, with a strong pipeline and increasing average contract size.
Negative Updates
Challenges in Akkodis Germany
Akkodis' revenues were 6% lower year-on-year, with Germany facing a 14% decline due to auto headwinds, impacting the EBITA margin significantly.
Pressure on Gross Margin
Gross margin was 50 basis points lower year-on-year, affected by currency translation, flexible and permanent placement reductions, and challenges in Akkodis Germany.
Decline in Permanent Placement
Permanent Placement revenues were 9% lower, contributing to gross margin pressure, particularly in Europe.
Company Guidance
During the Q2 2025 conference call, Adecco Group provided several key metrics and guidance related to its financial performance and strategic initiatives. The Group saw an increase in market share, with the overall Group gaining 205 basis points and Adecco gaining 130 basis points in Q2. Revenue trends showed improvement, with Adecco recording a 2% year-on-year increase on a trading day adjusted basis, driven by a 14% rise in Adecco Americas and a 9% increase in Adecco APAC. The Group's gross profit stood at EUR 1.1 billion, with a gross margin of 18.9%. EBITDA, excluding one-offs, was EUR 141 million with a margin of 2.5%. Adjusted EPS was reported at EUR 0.46, while operating cash flow was EUR 81 million. The Group maintained strong cash conversion at 98%, supported by disciplined working capital management. Strategic client wins were highlighted, including contracts with a global OEM for EV battery production and a multiyear agreement with a French defense company. The Group remains committed to a net debt-to-EBITDA ratio of 1.5x or below by the end of 2027, with significant cash flow improvements anticipated in H2 2025. Guidance for Q3 suggests a sequential rise in gross margin, modestly lower SG&A expenses, and improved profitability compared to H1 levels.Adecco Group AG Financial Statement Overview
Summary
Adecco Group AG demonstrates stable financial performance with moderate profitability and effective cash conversion. Challenges exist in revenue growth and improving net margins. Adecco should focus on enhancing profitability and free cash flow generation while managing debt to ensure continued financial health.Income Statement
Adecco Group AG shows a slight decline in revenue over the TTM, with a decrease from the previous year. The Gross Profit Margin for TTM stands at 19.35%, suggesting reasonable cost management. However, the Net Profit Margin is relatively low at 1.26%, indicating challenges in translating revenue into profit. The EBIT and EBITDA margins for TTM are 2.30% and 3.18%, respectively, reflecting a moderate operating performance. Overall, the income statement reflects stable but modest profitability with room for improvement in net income growth.65
Positive
Balance Sheet
The Balance Sheet shows a stable financial position with an Equity Ratio of 29.52%, indicating a moderate reliance on equity financing. The Debt-to-Equity Ratio is 1.01, highlighting a balanced use of debt and equity. Return on Equity (ROE) for TTM is 8.20%, which is moderate and suggests reasonable returns for shareholders. However, the company should monitor its debt levels to ensure financial flexibility.70
Positive
Cash Flow
Adecco Group AG's cash flow statement reveals a decline in Free Cash Flow, with a growth rate of -12.79% over the TTM period. The Operating Cash Flow to Net Income Ratio is 2.17, indicating a strong ability to convert net income into cash flow. The Free Cash Flow to Net Income Ratio is 1.69, reflecting efficient cash generation relative to net earnings. The cash flow statement shows solid cash conversion, but declining free cash flow growth warrants attention.68
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
26.14
Price Trends
24.57
Positive
23.86
Positive
23.15
Positive
Market Momentum
0.43
Negative
56.45
Neutral
81.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ADEN, the sentiment is Positive. The current price of 26.14 is above the 20-day moving average (MA) of 25.79, above the 50-day MA of 24.57, and above the 200-day MA of 23.15, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 56.45 is Neutral, neither overbought nor oversold. The STOCH value of 81.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:ADEN.
Adecco Group AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Performance Comparison
CH:ADEN
Adecco Group AG
26.14
-0.96
-3.54%
CH:KNIN
Kuehne + Nagel International AG
170.80
-75.62
-30.69%
CH:SGSN
SGS SA
82.86
-7.46
-8.26%
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.