Summary and highlights

• Revenues down 2% year-on-year, and down 3% organically1 and trading days adjusted (TDA), reflecting market conditions, in particular slower growth in Europe. Revenues in June down 3% organically and TDA, in-line with Q2

• Strong improvement in gross margin, up 70 bps yoy to 19.0%, driven by focus on pricing and business mix

• EBITA2 margin excluding one-offs3 4.5%, flat yoy; underlying up 20 bps yoy

• GrowTogether transformation programme drives further productivity improvement and enhances customer value

• Strong balance sheet with Net Debt/EBITDA excluding one-offs 1.2x (improved by 0.2x yoy); cash conversion 84% and improved DSO

“The Group’s Q2 2019 results demonstrate further strong execution of our strategy. Despite the external headwinds, we continued to deliver consistent underlying margin expansion and improved productivity. We increased gross margins for the fourth consecutive quarter, supported by a focus on higher value solutions, the roll-out of value-based pricing tools and tighter labour markets.

Organic revenue growth slowed in the quarter, driven mainly by Europe. This partly reflected robust growth in the same period of the prior year, and also continued weakness in automotive and manufacturing sectors in many European economies. We see the year-on-year comparison base becoming less challenging as the second half progresses, given the slowdown in the European economy in the late summer of 2018.

GrowTogether supported a further improvement in FTE productivity in Q2 and we remain on track to deliver the targeted incremental savings of EUR 70 million in 2019.

Increased collaboration between our brands has created new opportunities to deliver improved solutions to our customers, with positive examples in Q2. Integrating General Assembly’s up/reskilling solutions into the Lee Hecht Harrison is enabling new client business. Additionally, we launched the Modis Academy in the US; an innovative solution to address persistent talent shortages in high-demand tech skills.

I thank all of our colleagues for their engagement and hard work as we continue to Perform, Transform and Innovate, to strengthen the Adecco Group’s leadership and to enable the success of our clients and candidates in the evolving world of work.”

Alain Dehaze, Group Chief Executive Officer