The following is a summary of the Adecco Group AG (AHEXY) Q1 2024 Earnings Call Transcript:
Financial Performance:
Adecco reported a Q1 revenue of €5.7 billion, with an unchanged growth rate year-on-year.
The gross profit margin was 19.8%, sequentially higher by 20 basis points, but lower year-on-year by 100 basis points due to business mix and pricing.
EBITA of €157 million was reported, a margin of 2.8%.
An adjusted EPS of €0.59 showed an 18% decrease year-on-year, mainly due to lower business income.
A negative free cash flow of €93 million was reported, which was €72 million better than last year.
The net debt to EBITDA at the end of the quarter was at 2.7x, inline with management expectations.
Cash conversion ratio stood at 73%.
Business Progress:
The company noted €26 million in net savings through their G&A savings program, a 13% reduction from their 2022 baseline.
The group announced a new organizational structure to streamline operations and optimize at local levels by mid-2024.
Portfolio actions incorporated Hired into LHH Recruitment Solutions.
20 AI-powered initiatives in the digital arena were scaled, offering significant potential for the future.
The company aims to continue gaining market share, with emphasis on productivity and G&A savings.
Adecco remains dedicated to its AI services, training future-focused skill sets such as Electric Vehicle transition and AI technologies.
Despite market obstacles, the executive team focuses on competitive outperformance, market share expansion, and disciplined execution.
The company presented a forecast for Q2 2024, expecting the gross margin to be in line with Q1 2024, and SG&A expenses to improve modestly.
Adecco plans to realize G&A savings of €150 million in H2, with the G&A program ending and CapEx trending lower.
Good B2B traction with General Assembly and offerings for training and upskilling are expected to gain momentum.
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