Annual Report 2012

Our target & priorities

We aim to reach an EBITA margin of above 5.5% in 2015 – a new peak for Adecco. The target 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 2012, the EBITA margin before restructuring and integration costs was 4.0%, down 10 bps when compared with the EBITA margin, on the same basis, for 2011. After two years of double-digit organic revenue growth, the positive trend halted in 2012 as a consequence of the recession in Europe. We managed, however, to substantially improve our gross margin, driven by price discipline and a better business and country mix. Combined with strong control of our cost base, the result was a limited decline in our EBITA margin before restructuring and integration costs. We are using the challenging economic period to extract the full potential of our organisation. We will refrain from acquisitions and focus on organic growth and initiatives directed at further increasing the efficiency of Adecco. Once the economies of our major markets start to expand, we will be optimally positioned to deliver strong operating leverage. From today’s perspective, based on more favourable economic conditions expected towards the end of 2013, we are convinced we will achieve our EBITA margin target of above 5.5% in 2015.

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

  • Retention: Retaining our own 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 offer and enhance an attractive 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 2012 was the organisational change from decentralised management to a centralised, global IT organisation and decision-making process. 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 33% [1] of the global staffing market. Demand for 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. Today, after the acquisition of DBM in the summer of 2011, we are also the global leader in the Lee Hecht Harrison (LHH) branded Career Transition (outplacement) and Talent Development business. Our much improved geographic reach means that we can better serve and attract global customers. The counter-cyclical nature of the Career Transition (outplacement) business is a good hedge during economically difficult times, as this business peaks during recessions. At the same time, the larger scale and a more flexible approach to cost management enable LHH to achieve double-digit 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 2013 we will continue to roll out specific operating models for different types of clients into further countries, following the successful implementation in a few 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 and 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.