Annual Report 2013

Our target & priorities

We aim to reach an EBITA margin of above 5.5% in 2015 – a new peak for Adecco. The target level was initially set at the beginning of 2010, after having increased the share of the higher-margin Professional Staffing business to above 20% of our total revenues. In 2013, the EBITA margin excluding restructuring costs was 4.4%, up 40 bps when compared with the EBITA margin excluding restructuring and integration costs of 4.0% for 2012. The recession in Europe caused revenues to be organically down from 2012 by 1% but we managed to improve our gross margin, driven by price discipline, a better business and country mix and the positive impact from the French CICE (tax credit for competitiveness and employment). At the same time, our SG&A reduced and was strictly controlled, benefiting from the restructuring initiatives started in 2012 and 2013. This resulted in a higher EBITA margin excluding restructuring and integration costs, despite declining revenues. As the economies of our major markets return to growth, we are well-positioned to deliver strong operating leverage. We continue to be very focused on reaching our EBITA margin target of above 5.5% in 2015. Based on the good progress on our six strategic priorities, recent trends and more favourable economic conditions expected going forward, we remain convinced we will achieve this target.

The strategic focus of the Adecco Group’s management is on employee Engagement, Information Technology (IT), Professional Staffing & Services, Segmentation, Business Process Outsourcing solutions and the Emerging Markets.

  • Engagement: Attracting, developing and retaining our employees is essential to building successful long-term relationships with both clients and associates. A better, longer-lasting relationship with our clients and associates protects our business and is a competitive advantage both from a revenue and also from a cost perspective. The regularly conducted Great Place to Work® survey on the job satisfaction of our own employees gives insight into how we can continuously improve our working environment.
  • Information Technology: An important strategic priority for the Adecco Group is the better use of IT to maximise business opportunities and to improve efficiency. A major milestone in 2013 was the development of global platforms for the six key focus areas covered by this transformational project. The aim is to optimise our IT processes through further consolidation of data centres and to standardise systems by key focus areas that are flexible, scalable and can be integrated. Additionally, we invest in our web presence to remain at the forefront of the emergence of new delivery models. The investments in IT are aimed at enhancing our cost leadership position but also at maximising our revenue-generation opportunities.
  • Professional Staffing & Services: Already today, Adecco is the global leader in Professional Staffing worldwide. However, it remains an essential part of the Group’s strategy to increase the share of revenues generated from Professional Staffing. This segment, with higher growth and margin potential, accounts for approximately 34% [1] of the global staffing market. Growth in higher-margin Professional Staffing, where penetration rates are still significantly lower than in the General Staffing segment, will be driven by scarcity of talent and higher wage growth for qualified personnel. We are also the global leader in Career Transition (outplacement) and Talent Development through our Lee Hecht Harrison (LHH) business. The counter-cyclical nature of the Career Transition business is a good hedge during economically difficult times, as this business peaks during recessions. At the same time, the large scale and a flexible approach to cost management enable LHH to achieve double-digit EBITA margins throughout the cycle.
  • Segmentation: Optimising the segmentation of our client base allows us to capture additional market and margin opportunities as we target to increase business with small and medium-sized clients. In 2014 we will continue to roll out specific operating models for different types of clients into further countries, following the successful implementation in several pilot markets.
  • Business Process Outsourcing solutions: As the world’s leading provider of HR solutions, Adecco considers the continuing trend towards Business Process Outsourcing (BPO) solutions, including Managed Service Programmes (MSP), Recruitment Process Outsourcing (RPO) and Vendor Management Systems (VMS) a major opportunity to differentiate its service offering. Large multinational clients increasingly seek to outsource their HR processes. With a global footprint and extensive know-how of local labour markets, Adecco is ideally positioned to take advantage of this trend. Our comprehensive solutions offering is unique and a key competitive advantage.
  • Emerging Markets: The Emerging Markets offer immense untapped growth potential for the staffing industry. Penetration rates of temporary staffing services are still at very low levels. The highly dynamic economic activity, the shift of production and growing investments in the Emerging Markets by multinational corporations are the main growth drivers for our business in these markets, which remain a strategic focus for us.


[1]Adecco estimate.