First-quarter revenue at the Adecco Group rose 5% year-over-year on an organic basis when adjusted for trading days. Growth was led by Modis, LHH recruitment solutions and Adecco Asia Pacific.
The company also announced a new CEO, Denis Machuel, who will take over from current CEO Alain Dehaze on July 1. The company also expects full ownership of Akka effective May 12 and will integrate that business with the company’s Modis division to operate as Akkodis.
| (€millions) | Q1 2022 | Q1 2021 | % change | % organic change, business days adjusted | Q1 2022 (US$millions) |
| Revenue | 5,446 | 4,971 | 10% | 5% | 6,065 |
| Gross profit | 1,151 | 998 | 15% | 9% | 1,282 |
| Gross margin | 21.1% | 20.1% | – | – | – |
| Net income | 92 | 124 | -26% | – | 102 |
“The targeted investment in headcount that we have deployed in Adecco is showing results, with notable improvement in several key regions, and LHH Recruitment Solutions continued to capture the strong market demand,” Dehaze said.
Adecco earnings are reported along its three global business units — Adecco, LHH and Akkodis.
Revenue by global business unit
| (€millions) | Q1 2022 | Q1 2021 | % change | % organic change, business days adjusted | Q1 2022 (US$millions) |
| Adecco | 4,226 | 4,007 | 5% | 4% | 4,706 |
| LHH | 461 | 446 | 3% | 1% | 513 |
| Akkodis | 759 | 518 | 47% | 14% | 845 |
The Adecco global business unit includes direct hire, temporary staffing, training and outsourcing.
Growth in the segment was led by Asia Pacific, where revenue rose 15% on an organic basis adjusted for trading days. The company cited strong APAC demand for outsourcing and permanent placement.
Adecco’s Americas revenue fell 6% with North American revenue down 8%. The company noted that talent scarcity hindered performance in its Adecco US operations. Meanwhile, Latin American revenue fell 4% amid the negative impact of a change in legislation in Mexico.
Adecco division revenue by geography
| (€millions) | Q1 2022 | Q1 2021 | % change | % organic, business days adjusted | Q1 2022 (US$millions) |
| France | 1,145 | 1,040 | 10% | 9% | 1,275 |
| Northern Europe | 597 | 641 | -7% | -8% | 665 |
| Germany, Switzerland, Austria | 363 | 341 | 7% | 3% | 404 |
| Southern Europe, Eastern Europe, Middle East, Africa | 973 | 908 | 7% | 8% | 1,084 |
| Americas | 615 | 611 | 1% | -6% | 685 |
| Asia Pacific | 533 | 466 | 14% | 15% | 594 |
In the Adecco Group’s LHH business segment, revenue rose 1% on an organic and trading-day adjusted basis. Brands included in the company’s LHH segment are Hired, General Assembly, Ezra, Badenoch+Clark, Spring Professionals and Pontoon.
LHH’s career transition and mobility revenue were down 35% because of weakness in the countercyclical outplacement business amid strength in the US and French economies. However, recruitment solutions revenue rose 15%, and learning and development revenue was up 3%.
In addition, the company reported Pontoon’s MSP and RPO solutions as well as Hired performed strongly in the first quarter.
Turning to the Akkodis business segment that comprises technology staffing and solutions, revenue was up 14% on an organic trading-days adjusted basis. The company said Modis America revenue rose 19% while Modis EMEA was up 12% and Modis APAC rose 9%.
The Akka integration is continuing apace, the company said.
Revenue by service line
| (€millions) | Q1 2022 | Q1 2021 | % change | % organic (not trading days adjusted) | Q1 2022 (US$millions) |
| Flexible placement | 4,246 | 4,088 | 4% | 2% | 4,728 |
| Permanent placement | 192 | 117 | 64% | 60% | 214 |
| Career transition | 71 | 94 | -24% | -34% | 79 |
| Outsourcing, consulting and other services | 851 | 593 | 43% | 23% | 948 |
| Training, upskilling and reskilling | 86 | 79 | 9% | 5% | 96 |
Guidance
The Adecco Group expects its year-over-year revenue growth rate to improve in the second quarter compared to the first. It reported healthy demand for talent services in a talent-scarce environment with rising wages, though it also recognized the challenges from the war in Ukraine and continued Covid-related global supply chain issues.
Share price and market cap
Shares in Adecco closed down 5.79% today in Europe to 36.28 Swiss francs (US$37.05); they were 1.06% above their 52-week low, according to FT.com. The company had a market cap of 6.54 billion Swiss francs (US$6.68 billion).