Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ADECCO SA-REG. We currently have 9 research reports from 1 professional analysts.
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M&A strategy difficult to understand
14 Dec 16
Adecco has sold its subsidiary Beeline, which offers software solutions for sourcing and managing an extensive workforce. Beeline has its headquarters in Jacksonville, Florida. Around 450 work for the company. Its major customers are the top Fortune 500 companies, of which over 135 have installed the VMS (vendor management system) software solutions. In 2014, Adecco acquired OneForce, the online staffing management platform and merged it with Beeline. GTCR, a private equity company, has acquired the majority stake in Beeline from Adecco. GTCR also has a stake in the software company IQNavigator which will be merged with Beeline. Adecco received US$100m in cash plus a US$30m note. According to our estimates, the total deal size will be around €400m and Adecco will own 25% of the new company. IQNavigator is the leading independent provider of non-employee workforce management solutions.
Performance driven by cost discipline
17 Nov 16
In Q3 16, revenues increased 2.4% to €5.81bn. Permanent placement grew by 5%, temporary staffing by 3% and outplacement revenues by 8%. By business line, revenues of professional staffing remained stable, however the business unit Medical & Science experienced the strongest growth rate of 10.2% to €108m. The gross margin declined from 18.9% to 18.7%. EBITDA dropped 10% to €315m and the EBITDA margin from 6.2% to 5.4%. EBIT also declined by 9.5% to €285m mainly due to additional restructuring charges of around €26m. The EBIT margin declined from 5.6% to 4.9%. Net profit reached €173m compared to a loss of €513m due to a goodwill impairment of €740m. In the first nine months, revenues grew 3.1% to €16.84bn. The gross margin declined from 18.9% to 18.8% and the EBITDA margin from 5% to 4.8%. EBITA declined marginally by 1.8% to €804m. France and North Americas contributed 54.1% to total EBITA and 42.3% to total revenues.
Q2 16 growth trend continued in July
10 Aug 16
The company reported solid Q2 16 results. Revenues increased 2% (organically 4%) to €5.7bn (estimate: €5.4bn) and EBIT improved 10.5% (organically 11%) to €273m (estimate: €258m). The EBIT margin increased from 4.4% to 4.8% and the gross margin improved from 18.6% to 18.8%. Net income improved 7% from €177m to €190m (estimate €181.6m). The two major markets France and North America contributed 42% to total revenues and 51.4% to EBITA. In the first half year, revenues increased 3.4% to €11.03bn. EBIT improved 3.6% to €492m and the EBIT margin remained unchanged at 4.5%. Also net income remained stable at €334m (-0.9%).
Adding value will be key!
05 Jul 16
IBM announced it is selling part of its customer support service business (CSS) to Adecco. The business is located in Erfurt and Leipzig with around 650 employees, of which 500 people are contract workers. Since the beginning of the year, IBM’s management has reduced the workforce in Germany by around 1,250 people. In total, a reduction in the German workforce of up to 3,000 people from 16,500 is planned up to 2017.
Performance driven by impairment charges and currency effects
09 Mar 16
Revenues increased 10.1% to €22.01bn and 4% at constant currency. Gross profit increased 12.9% to €4.18bn and the gross margin improved from 18.5% to 19%. EBIT before the impairment of €740m jumped 16.7% to €1.04bn and the EBIT margin increased from 4.5% to 4.7%. Net profit, however, plummeted from €640m to €8m mainly due to impairment charges of around €740m in Q3 15. Despite this steep profit decline, management increased the dividend by 14% from CHF2.10 to CHF2.40. In the fourth quarter, revenues increase 9.7% to €5.67bn (at cc 5%). Gross profit increased 11.8% (at cc +6%) to €1.09bn and the gross margin improved from 18.9% to 19.2%. The positive currency effect accounted for 15 basis points and acquisitions 10 basis points. EBIT rose by 6.6% to €250.4m and the EBIT margin declined from 4.8% to 4.6%.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
Small Cap Breakfast
17 Jan 17
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.