Annual Report 2011

Our results
Review of Group results

Key figures at a glance

Download xls sheet

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Gross profit




Gross margin












EBITA margin




Net income attributable to Adecco shareholders




Basic EPS




Diluted EPS




Operating cash flow




Dividend per share in CHF

1.80 [1]



In 2011 we continued to focus on executing our strategy. Industrial staffing remained the growth driver of our results. With the performance achieved to date we remain on track to reach an EBITA margin above 5.5% mid-term.

Highlights for the Adecco Group  In 2011 we faced overall good business conditions. Whereas we experienced strong momentum in the first half of the year, tougher comparables and the economic uncertainty related to the sovereign debt crisis in Europe and the USA led to slower growth in the second half of 2011.

Our main markets, France and North America, accounting for 48% of total revenues, respectively grew 10% and 8% organically. Germany & Austria and Italy had very strong growth, both more than 20% in 2011, also driven by their export oriented exposure. The UK & Ireland and Japan, returned to organic growth in 2011. The Emerging Markets continued to expand strongly double-digit.

From a business line perspective, growth was still strongest in the Industrial segment. Growth in Professional Staffing was held back by the IT segment in North America. In 2011, revenues stemming from Professional Staffing and Solutions represented 22% of Group revenues compared to 23% in 2010. The slightly lower proportion of Professional Staffing and Solutions in 2011 compared to 2010 is mainly a result of faster revenue growth in Industrial and Office (General Staffing) in 2011, with growth rates of 13% and 9% respectively. In our Solutions segment, the counter-cyclical career transition business reported an organic decline, while growth in MSP, RPO and VMS was strongly double-digit.

The uncertain and rather muted economic development across the globe meant that companies lacked the confidence to hire human resources on a permanent basis, which fostered demand for flexible workforce solutions. In the automotive, industrial and manufacturing sectors we experienced the strongest demand for staffing services. From a business mix perspective this led to higher growth in the lower-margin Industrial business. Also, we generated higher revenue growth with larger clients and less so with small or medium size clients. This again led to higher growth in the lower margin businesses. Lastly, the precarious debt situation in many countries led to austerity measures that also impacted the HR industry in 2011. In the UK & Ireland, for example, this meant significantly reduced demand for staffing services in the public sector. In France, which is our largest market, the government decided to reduce subsidies granted to employers for their typically lower-skilled employees earning low wages. In order to compensate for the subsidy shortfalls, we needed to raise prices for our services throughout 2011. From a profitability perspective, we therefore experienced some headwinds in 2011. We delivered double-digit revenue growth in 2011 for the second consecutive year, benefiting from a structural shift in demand towards more flexible workforce solutions and we were able to maintain the EBITA margin, through price discipline and tight cost control. This despite the unfavourable business mix and the subsidy cuts in France.

In 2011 we successfully completed the integration of MPS Group which we acquired in January 2010. Initially targeted synergies of EUR 25 million were clearly exceeded. With the acquisition of MPS Group, Adecco attained the worldwide lead in Professional Staffing.

Included in our results since September 1, 2011, is Drake Beam Morin, Inc. (DBM), a career transition (outplacement) and talent development services company. Combining Adecco’s Lee Hecht Harrison (LHH) business with DBM created the world’s leading career transition and talent development services provider. Having joined forces with DBM considerably enhances LHH’s existing geographic footprint. With a strong presence historically in its main markets of the USA and France, LHH through this acquisition also attained a leading position in the UK, Canada and Brazil, which are among the largest markets in the career transition and talent development services sector. This move strengthens Adecco with an effective counter-balance to the temporary and permanent staffing business, given the counter-cyclical nature of the career transition sector.

Main financial highlights for our company in 2011:

  • Revenues up 10% to EUR 20.5 billion (up 10% organically [2])
  • Gross margin at 17.4%, down by 40 bps (-60 bps organically)
  • SG&A up by 6% (up 4% organically)
  • EBITA of EUR 814 million, increased by 13% (14% organically). EBITA in 2011 includes EUR 20 million integration costs (EUR 33 million in 2010)
  • EBITA margin of 4.0%, up 10 bps (4.1% before the EUR 20 million integration costs for MPS and DBM)
  • Net income attributable to Adecco shareholders of 519 million, up 23%
  • Strong operating cash flow of EUR 524 million, up 15%
  • Proposed dividend of CHF 1.80 [1] per share, up 64%

Other highlights:

  • In April 2011, we lengthened the maturity profile of our debt and took advantage of favourable market conditions. EUR 500 million fixed rate notes due in 2018 with a coupon of 4.75% were issued and the proceeds were partly used to refinance an aggregate nominal amount of EUR 311 million of outstanding notes, consisting of EUR 167 million of the EUR 500 million 4.5% notes due 2013 and EUR 144 million of the EUR 500 million 7.625% notes due 2014.
  • At the end of August 2011, we successfully completed the acquisition of DBM. We are now the global leader in the career transition (outplacement) and talent development sector, with a significantly expanded global footprint.
  • On February 8, 2012, Adecco S.A. placed a 4-year CHF 350 million bond with a coupon of 2.125%. The notes were issued within the framework of the Euro Medium Term Note Programme and are traded on the SIX Swiss Exchange. The proceeds are for general corporate purposes.


[1]Proposed by the Board of Directors.

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