Annual Report 2013

Letter from Chairman & CEO

2013 marked a year of labour market stabilisation for most regions. This trend is likely to continue, with the OECD predicting global growth of 3.5% in 2014. At the same time, the operational environment of businesses around the world continued to change at a rapid rate. Organisations are being challenged to adapt their employment practices to remain competitive. As a strategic partner for over 100,000 clients in more than 60 countries and territories, Adecco helped to find the best talents for our clients. We made a difference for millions of people, for whom we found a first job, a second one and a third one: in so doing, we provided them with an income, and we gave them dignity and perspective.

For Adecco, 2013 was a year of encouraging performance. Early on we saw signs of stabilisation in our business; our financial results throughout the year confirmed this view. The revenue decline eased in the first half of the year and most markets returned to growth in the second. In 2013 Group revenues declined by 1% organically. Our gross margin increased from 17.9% in 2012 to 18.3% in 2013. EBITA excluding restructuring and integration costs increased from EUR 813 million in 2012 to EUR 854 million in 2013. Net income attibutable to Adecco shareholders increased year over year by 48% to EUR 557 million.

At regional level the picture was very diverse. Nevertheless, Adecco reported a gradual improvement in most markets. Thanks to increased demand for flexible labour, we returned to growth in many countries in Europe, with a particularly encouraging pick-up in Germany & Austria, Iberia, Italy and Benelux, while France lagged behind the other European markets. North America held up very well, delivering good growth in the IT and Industrial businesses, as did the Emerging Markets.

Overall we have strengthened our leading position by adapting to the fast-changing economic environment. At the upcoming Annual General Meeting, the Board of Directors will propose a dividend of CHF 2.00 to shareholders. This dividend would be equal to a pay-out ratio of 47%, which is within our current pay-out range of between 40 and 50% of adjusted net earnings.

The increasing volatility in the economic cycle has shown that strategic Human Resources solutions are fast becoming fundamental to business leaders in all industries and markets. Adapting quickly to changing market conditions, Adecco is the trusted business partner to numerous organisations across the globe. The recovery is becoming tangible, which means that at this stage of the cycle companies are hiring temporary labour to meet demand. This is indeed positive news for Adecco: there are numerous opportunities to be seized, for only flexibility can keep our clients competitive and in business.

Although the world’s economy is showing signs of improvement, unemployment and the skills mismatch continue to feature high on the political and business agenda. Countries in the Northern Hemisphere are struggling to match talent with market demand. In the USA, for example, millions of jobs in manufacturing and agriculture have shifted to the services and creative sectors. Germany is struggling to find enough talent with MINT training (Mathematics, Informatics, Natural Sciences, Technology) to match the more than 90,000 technical and engineering vacancies. At the same time, up to eight million jobs are left vacant each year in the USA and Europe.

Flexibility is central to matching talent with vacant positions, yet strict rules and regulatory barriers continue to limit labour mobility between countries and regions. Although technological advances are allowing for greater adaptability in the workplace, the regulatory framework within which we operate must change too. Barriers that prevent HR services from playing their role in creating jobs need to be removed.

Programmes such as the Adecco Way to Work™ are an example of the ways in which we strive to increase the employability of a generation at risk of exclusion from the workforce. On April 30, 2013 over 10,000 Adecco employees in 50 countries kicked off the Adecco Way to Work™ programme. We went into the streets, visited nearly 300 schools and universities to offer career advice, guidance and free training workshops. There were over 1,000 street day activities and over 2,000 branches held open days. 20,000 coaching sessions were held and in total we reached out to well over half a million young people.

Equally, we are helping our clients better understand the role that talent plays as the key resource of the global economy. We help decision-makers understand what they can do to achieve or maintain a competitive edge, whether they are in Beijing or Boston, Buenos Aires or Berlin. Adecco was proud to launch the first annual Global Talent Competitiveness Index (GTCI) with partners INSEAD and the Human Capital Leadership Institute (HCLI) in Singapore in November 2013. This rigorous study confirms that talent will play an ever-increasing role in defining the economic outlook of a country. Talent becomes the future currency: the value that businesses now place on talent for today’s and tomorrow’s successes provides rich opportunities for our industry.

On a strategic level, we remain focused on meeting the demands of the global labour market. We continue to develop our operational excellence, specialisation and more efficient delivery models. 2013 saw us dedicate particular efforts to the centralisation of our IT organisation and an improved segmentation of our client base. This will help us further cement our leading position in the HR industry and put us in a strong position for growth.

It is clear that Adecco’s prospects are excellent. There is an ever-greater need for a strategic Human Resources partner that is best-equipped to help businesses pursue growth, underpinning the emergence of the global economy from recession. In fulfilling this role, we remain committed to achieving value for our shareholders and our stakeholders by doing what we are best at: providing ‘better work, better life’.

We sincerely thank you, our shareholders, as well as our clients, associates and colleagues for your support and confidence in Adecco in 2013.


Rolf Dörig

          Patrick De Maeseneire
          Chief Executive Officer