Business review

The strong improvement in the EBITA margin in 2010 is evidence that the leaner cost base is paying off. The Company is fully on track to reach an EBITA margin above 5.5% mid-term.

Review of Group results

Key figures at a glance

Download xls sheet

in EUR millions









Gross Profit









Net income attributable to Adecco shareholders



Basic EPS



Diluted EPS



Dividend per share in CHF

1.10 [1]


[1]Proposed by the Board of Directors.

Highlights for the Adecco Group

Business conditions for Adecco improved significantly in 2010, as the economy gradually strengthened. Revenue growth recovered with strong momentum throughout the year. Our main markets, France and North America, accounting for 49% of total revenues, were amongst the first to return to year-on-year growth in the first quarter. Apart from the UK & Ireland and Japan, all of our main markets returned to growth during 2010. The Emerging Markets, which were hardly impacted by the global recession, continued their impressive growth momentum. From a business line perspective, growth was most pronounced in the Industrial segment, but we also saw accelerating demand for our later-cyclical businesses Office and Professional Staffing.

The severity of the recent economic downturn has highlighted the importance of a flexible workforce. Despite generally improving trends, uncertainty over the economic outlook and a lack of confidence of companies to hire on a permanent basis clearly helped foster the strong demand for our services. Adecco used the downturn to structurally improve the business by reducing the branch network, optimising delivery channels, centralising administrative processes and improving client segmentation. As a result, in 2010 the Group fully benefitted from better business conditions and the strong recovery in demand for HR services. Coupled with continued tight cost control and price discipline this resulted in double-digit revenue growth and attractive operating leverage.

The good results were accentuated by the increased exposure to the higher margin Professional Staffing business through the acquired MPS Group, included in our results as of February 1, 2010. The integration of MPS Group progressed well during the course of 2010 and the business performed above expectations, both in terms of revenues and profitability. We are fully on track to complete the integration of MPS Group in 2011 and will even exceed the initially targeted synergies of EUR 25 million. The integration of Spring Group, which we acquired in 2009, was successfully completed at year end 2010 and the targeted synergies of EUR 13 million were slightly exceeded. Both Spring and MPS positively contributed to the good results achieved in the UK & Ireland as well as in North America. Expanding our share of revenues stemming from the Professional Staffing business is a clear priority for the Adecco Group. Following the acquisitions of Spring and MPS, we significantly improved the revenue mix, with the proportion of the Professional Staffing business increasing from 20% of 2009 Group revenues to 25% of 2010 Group revenues, thereby better mirroring the global staffing market. We are now the market leader in this segment, with a very good platform to also grow the Professional Staffing business on an organic basis.

Main financial highlights for our company in 2010:

  • Revenues up 26% to EUR 18,656 million (+12% organically [1])
  • Gross margin at 17.8%, down by 10 bps or down 90 bps organically and on an adjusted [2] basis
  • SG&A was flat on an organic and adjusted basis
  • EBITA [3] of EUR 722 million, increased by 142% or 34% organically and adjusted. EBITA before integration costs amounted to EUR 755 million, up 40% adjusted and organically
  • EBITA margin up 190 bps to 3.9%. EBITA margin before integration costs was up 100 bps to 4.1% on an adjusted basis
  • Operating income at EUR 667 million
  • Net income attributable to Adecco shareholders of 423 million, compared to EUR 8 million in 2009

Other highlights in 2010 included:

  • Following the acquisition of Spring Group in 2009, we successfully closed the acquisition of MPS Group at the end of January 2010 in a move to further expand our Professional Staffing business, particularly in the US, the largest Professional Staffing market.
  • In November 2010, Adecco Financial Services (Bermuda) Ltd. fully repaid the outstanding portion of the CHF 600 million (originally CHF 900 million) zero-coupon convertible bonds due in 2013. Following the exercise of the put option by bondholders in the third quarter of 2010, Adecco exercised its right to redeem the remaining outstanding portion in the fourth quarter of 2010.
  • In December 2010, Adecco announced a joint venture with Beijing Foreign Enterprise Human Resources Service Co. Ltd (FESCO), one of the leading HR service companies in China. The Shanghai-based joint venture, FESCO Adecco, is operational since January 2011 and already has over 100,000 associates on assignment every day. Under the terms of the joint venture, FESCO and Adecco hold 51% and 49% of the equity respectively. Shanghai is the largest HR market in China. Pooling Adecco’s global staffing know-how with a Chinese partner, who has local connections and an established branch network, marks an important strategic step forward for Adecco to take advantage of the growth potential in China and underlines the Group’s strategic focus on the Emerging Markets.


[1]Organic growth is a non-U.S. GAAP measure and excludes the impact of currency, acquisitions and divestitures.

[2]Adjusted is a non-U.S. GAAP measure excluding in 2009, for better comparison purposes, the French business tax of EUR 60 million in costs of services and EUR 4 million in SG&A as those business tax components are shown as income tax as of 2010. It also excludes in 2009 the positive impact on gross profit of EUR 25 million due to favourable developments in France resulting in the reassessment of existing accruals and the negative impact of EUR 7 million on gross profit due to a sales tax accrual in the UK related to prior years, as well as the negative impact on SG&A of EUR 121 million associated with restructuring costs.

[3]EBITA is a non-U.S. GAAP measure and refers to operating income before amortisation and impairment of goodwill and intangible assets.