This article first appeared on GuruFocus .
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Revenue:Group revenue rose 5.6% year-on-year on an organic training days adjusted basis in Q2.
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Gross Profit:Gross profit reached EUR1.1 billion, with a gross margin of 18.6%.
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Gross Margin:Organic gross margin was 20 basis points lower year-on-year, an improvement from the 40 basis point decline in Q1.
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EBITDA:EBITDA excluding one-offs was EUR165 million, up 21% year-on-year on an organic constant currency basis.
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EBITDA Margin:EBITDA margin expanded by 30 basis points year-on-year to 2.8%.
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Adjusted EPS:Adjusted EPS increased by 31% year-on-year.
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Net Debt-to-EBITDA:Net debt-to-EBITDA ratio, excluding one-offs, was 2.7 times, a 0.5 times improvement compared to the prior period.
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Cash Conversion:Last 12-month cash conversion ratio was 83%.
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Cash Flow from Operations:Q2 cash flow from operating activities was EUR23 million, down EUR58 million versus the prior year period.
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Free Cash Flow:Free cash outflow was EUR14 million, including capital expenditures of EUR37 million.
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DSO:DSO remained at 53 days.
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SG&A:SG&A expenses were stable year-on-year in absolute terms and 60 basis points lower as a percentage of revenues.
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Productivity:Productivity rose 6% year-on-year, with selling FTEs 2% lower.
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Organic Dropdown Ratio:Organic dropdown ratio was 64% in Q2.
Release Date: August 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Adecco Group AG ( AHEXY ) delivered strong organic revenue growth of 5.6% year-on-year, with continued market share gains of 160 basis points in Q2.
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The company's EBITDA excluding one-offs rose 21% year-on-year on an organic constant currency basis, with margin expansion of 30 basis points to 2.8%.
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Akodis returned to revenue growth, with EBITDA up 23% and margin improvement of 180 basis points, driven by strong aerospace and defense demand and a healthy 91% utilization rate.
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Agentic AI deployment exceeded targets, reaching 50% of Adecco revenue enabled by agents, with plans to raise to 70% by end of 2026, improving fill rates by 10% and reducing time-to-submit by 40%.
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The company made solid progress on deleveraging, reducing net debt-to-EBITDA ratio by 0.5 times year-on-year to 2.7 times, with a strong cash conversion ratio of 83%.
Negative Points
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Gross margin declined 20 basis points organically year-on-year, though improving sequentially from a 40 basis point drop in Q1.
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Permanent placement gross profit remained negative, down 1% year-on-year, though stabilizing from a 7% decline in Q1.
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Adecco France revenues declined 1% year-on-year, with margin pressure due to headwinds in logistics and healthcare sectors.
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Akodis Germany continued to face challenges, with revenues down 3% and further restructuring charges due to unexpected softness in automotive, impacting one-off costs.
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Q2 cash flow from operating activities was down EUR58 million year-on-year, driven by working capital absorption from revenue growth, with free cash outflow of EUR14 million.
Q & A Highlights
Q: Can you provide more color on the Q3 outlook given tougher comps, and what are the incremental costs associated with the AI investments, especially since the corporate line was up 15% this quarter? A: CEO Denis Machuel and CFO Valentina Ficaio noted that momentum has continued into early August, with the exit rate aligned with the Q2 average. While comps get tougher by 300 basis points, they feel comfortable compensating for these headwinds given strong volumes. On AI, the company has already achieved its year-end target of 50% of Adecco revenue enabled by agents in Q2 and raised it to 70% by end of 2026. They have a fixed-cost contract with their AI provider for unlimited volumes, keeping costs under control.
Q: Given the improving cyclical elements like SMEs and permanent placement, when can we expect gross margins to turn positive year-on-year? Also, will Adecco keep pace with peers on sequential growth in Q3? A: CFO Valentina Ficaio highlighted clear sequential improvement in gross margin, from -40 bps in Q1 to -20 bps in Q2, with each component improving (Flex -25 bps, Perm -15 bps, Outsourcing +20 bps). She expects a modest sequential improvement in Q3. CEO Denis Machuel emphasized the company's consistent market share gains (14 of last 16 quarters) and strong volume momentum, with incentives based on relative revenue growth, positioning them well to continue outperforming.
Q: Can you explain why restructuring charges were up sequentially in Q2, particularly for Akodis Germany, and what geographic areas might see more charges? Also, what does the 70% revenue target for agentic AI mean in practice? A: CEO Denis Machuel explained that Akodis Germany faced further project stops or slowdowns from two main OEMs, creating an unanticipated bench, necessitating additional restructuring. The company is pivoting talent to growth areas like aerospace and defense (+20% in Akodis). On AI, the agents automate search, match, first contacts, and onboarding, allowing recruiters to focus on human connections, improving fill rates and time-to-fill, which helps win market share.
Q: Can you provide more color on the strength in aerospace and defense within Akodis and the timeline for this pivot? A: CEO Denis Machuel noted strong growth across geographies (France +15%, Germany +9%, Spain +12%, North America +20%, UK +20%), working with major clients like Airbus, Safran, and Rheinmetall. With massive order books and a decade of runway, the company is doubling down. CFO Valentina Ficaio added that Aerospace and Defense is a higher-margin end market, which will benefit both Adecco and Akodis margins as they scale globally.
Q: What is the spread between bill rates and wage inflation, and can you give more color on Akodis margins in better-growth regions and the timeline to the 10% medium-term target? A: CFO Valentina Ficaio confirmed pricing is firm across all segments with a positive spread that improved slightly Q1 to Q2. For Akodis, growth in APAC, Iberia, and Italy brings higher profitability (double-digit), while France and the US are more normalized (mid-to-high single-digit). Germany is expected to reach run-rate profitability in H2. CEO Denis Machuel added that shifting from time-and-material to statement-of-work contracts is helping improve margins, with H2 typically significantly better than H1.
Q: Can you provide color on SME performance across the group, whether the Q2 restructuring charge runs into Q3, and how big autos is now in Akodis Germany? A: CEO Denis Machuel noted strong SME traction in North America (+23%) and EMEA (double-digit), driven by the "Branch of the Future" project injecting agentic AI, though he remains unsatisfied and focused on improvement. CFO Valentina Ficaio confirmed a small spillover of one-offs into Q3 (~EUR15 million), with the charges not fully cash-related. Autos now represents around 20% of Akodis overall and is "midway between 20% and 40%" in Germany, down from over 40% initially.
Q: With North America leading the recovery and strong SME growth, is gross margin in North America now improving year-on-year? Will the pace of EBITDA margin improvement continue in H2, and will free cash flow catch up? A: CEO Denis Machuel confirmed North America's turnaround is delivering, with SME growth improving from +7% in Q1 to +23% in Q2, bringing better gross margins, though the SME business remains subscale with significant room to grow. CFO Valentina Ficaio confirmed confidence in continued year-on-year EBITDA margin improvement in H2, driven by gross margin improvement, business mix, and operating leverage. On cash flow, the 83% cash conversion ratio is strong given 6% revenue growth, and H2 cash generation is heavily weighted, promising much better performance.
Q: How do the 25-35% productivity savings from Agentic AI connect to the business benefits, given gross profit per FTE was only up 2%? Does this imply significant restructuring ahead? Also, can you discuss the small disposal this quarter and any portfolio review? A: CEO Denis Machuel framed AI as a growth play, enabling the same FTE count to serve more clients and generate more revenue, especially as it deploys to branches for SMEs. He confirmed the disposal of a non-core, margin-dilutive US Akodis business, with proceeds funding two bolt-on acquisitions in aerospace engineering (India and France). CFO Valentina Ficaio emphasized looking at productivity through revenue growth (5.6%) and EBITDA improvement (21%), with a 64% dropdown ratio and productivity up across all business units.
Q: Adecco France's margin declined at a similar rate to Q1 despite cost actions. Is volume improvement required for margin recovery, or can restructuring drive improvement? Also, can you quantify annualized savings from restructuring? A: CEO Denis Machuel noted France is a pressure point with performance aligned to peers (-1% growth), suffering in logistics and healthcare but strong in manufacturing and autos. Actions include pushing SME growth, scaling talent supply chain, and optimizing SG&A (G&A down 10% year-on-year). CFO Valentina Ficaio confirmed restructuring benefits will flow through starting Q4, further helping margin expansion into Q4 and fully in 2027.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
