Annual Report 2015 Visit Annualreport2015.Adecco.Com
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Annual Report 2015 Visit annualreport2015.adecco.com 15 E_00_Annual_Report_2015 [P].indd 1 24.03.16 09:20 Contents Company Report 2 About us 3 2015 in brief 4 Letter from the Chairman & CEO 6 Interview with the CEO 8 The HR services industry 14 Our strategy 18 Our services and business lines 21 Our people 25 Our corporate social responsibility 29 Enterprise risk management 32 Investor Relations Financial Review Adecco Group 39 Operating and financial review and prospects 58 Selected financial information 59 Consolidated financial statements 104 Report of the Statutory Auditor on the Consolidated Financial Statements Financial Review Adecco S.A. (Holding Company) 106 Financial statements 108 Notes to financial statements 118 Major consolidated subsidiaries of the Adecco Group 119 Proposed appropriation of available earnings 120 Report of the Statutory Auditor on the Financial Statements Corporate Governance 124 Applicable Corporate Governance standards 125 Structure, shareholders, and capital 130 Board of Directors, Executive Committee, and compensation 145 Further information Remuneration Report 152 The Company‘s compensation philosophy and determination of remuneration principles and compensation 154 Remuneration 2015 159 Remuneration outlook 2016 161 Details of compensation elements 169 Report of the Statutory Auditor on the Remuneration Report 170 History 172 Addresses 173 Key figures Our vision We inspire individuals and organisations to work more effectively and efficiently, and create greater choice in the domain of work, for the benefit of all. Our business has a positive impact on millions of people every day. Helping people find gainful employment is our common purpose and our contribution to society. About us 32,000+ 700,000~ 5,100~ FULL-TIME EQUIVALENT ASSOCIATES ON BRANCHES IN OVER 60 EMPLOYEES 1 ASSIGNMENT DAILY 2 COUNTRIES AND TERRITORIES 1 THE SERVICES WE OFFER THE PROFILES OF OUR CANDIDATES Gross profit split by service line Revenue split by business line 10% 24% 72% 8% 50% 12% 5% 2% 4% 10% 3% Temporary Staffing 72% Industrial 50% Finance & Legal 4% Permanent Placement 10% Office 24% Medical & Science 2% Career Transition 8% Information Technology 12% Solutions 3% Outsourcing, Talent Development, Engineering & Technical 5% and other services 10% OUR GEOGRAPHIC PRESENCE In over 60 countries Revenue split by segment and territories France 22% North America 21% UK & Ireland 10% Germany & Austria 8% Japan 5% Italy 6% Benelux 5% Nordics 3% Iberia 4% Australia & New Zealand 2% Switzerland 2% Emerging Markets 10% Lee Hecht Harrison 2% 1 Year end 2015. 2 Average 2015. 2 Adecco Group Company Report 2015 2015 in brief REVENUES UP 4% GOOD CASH DIVIDEND ORGANICALLY GENERATION INCREASED Revenues increased Cash flow from Dividend per share to EUR 22.0 billion. operating activities of CHF 2.401, up 14% increased to compared to last year. EUR 799 million. EBITA MARGIN EXCLUDING ONE- WAY TO WORK OFFS UP BY 40 BPS NEW MANAGEMENT REACHING TEAM 1.2 MILLION JOB EBITA margin SEEKERS excluding one-offs New CEO and CFO, increased to 5.2%. and additional More than 7,300 changes in the employees in over Executive Committee. 1,130 cities in 54 3.4 MILLION KM countries hit the FOR WIN4YOUTH streets to help com- NEW TARGETS bat youth unemploy- Employees world- THROUGH-THE- ment, supporting 1.2 wide clocked up CYCLE 2 million job seekers. a record 3.4 million kilometres by swim- Organic revenue ming, cycling, and growth at least in line 28,000 ATHLETES running, ensuring with main peers. SUPPORTED a donation of EBITA margin USD 370,000 to eight To date, the IOC and 4.5–5.0%. foundations world- IPC Athlete Career wide. Operating cash flow Programmes have conversion above supported more 90%. than 28,000 elite athletes from over 185 countries with career guidance, job counselling, and placement. 1 As proposed by the Board of Directors. 2 On average through-the-cycle. Adecco Group Company Report 2015 3 Dear Shareholder, In 2015, economic trends were mixed: the global economy which we operate. The main staffing markets presented diver- expanded modestly, but growth failed to develop in line with gent trends during the year. For the whole of 2015, growth early expectations. The USA recovered as forecast and the remained very good in Southern Europe and the Emerging jobless rate fell sharply, but in much of Europe growth was Markets, and Benelux accelerated to end the year strongly. weak and unemployment remained stubbornly high. Doubts France returned to growth, with the market clearly picking up about the economic outlook in China combined with the col- after the summer. In Japan growth was moderate throughout lapse in the price of oil and other commodities dented the the year, while in the UK and Germany revenues were broadly confidence of markets and corporates in the second half of stable. In North America growth slowed during the year. the year. These concerns have not abated, and in such cir- cumstances the challenges for global organisations to stay Looking ahead, the future challenge for us as the market competitive grow only greater. leader in HR solutions is not only in coping with heterogene- ous or diverging economic conditions, or even in addressing For the Adecco Group, 2015 was a year of transition charac- the disparate cultural and societal attitudes to work evident in terised by changes. Patrick De Maeseneire stepped down our markets across the globe. More fundamentally, we believe after six years as CEO; the Board of Directors thanks him for shifts are under way in the world of work, with new challenges his commitment to the Adecco Group and wishes him well in and opportunities applying globally. his future endeavours. In September last year, Alain Dehaze took over the leadership of the Adecco Group. Four new mem- The world of work is changing fast. A World Economic Forum bers joined the Executive team. The Board of Directors looks report on the Future of Jobs published in January 2016 showed forward to working with the new leadership team, which has that about six out of ten children now entering primary school made a strong start. We would also like to thank our 32,000 will end up working in types of jobs that do not even exist employees around the world who delivered excellent perfor- today. Technology is moving so quickly that we must be pre- mance and displayed outstanding commitment during this pared for the significant shifts ahead. Those changes pose year of transition. pivotal challenges for our business, as does the competition for talent. On January 19, 2016, on the eve of the World Eco- Despite the difficult environment in 2015, we recorded 4% or- nomic Forum annual meeting in Davos, we presented the third ganic revenue growth and reached a strong 5.2% EBITA mar- edition of the Global Talent Competitiveness Index compiled to- gin excluding one-offs. Net profit at EUR 8 million was gether with our partners INSEAD and Singapore’s Human Capi- impacted by an impairment of goodwill of EUR 740 million rec- tal Leadership Institute. The 2015–2016 Index shows clearly ognized in Q3 2015. Thanks to continued good cash flow and how those countries with a strong focus on education and in- the solid balance sheet, at the next Annual General Meeting novation continue to top the list of talent champions, with Swit- on April 21, 2016, the Board of Directors will propose a divi- zerland and Singapore ranking first and second respectively. dend of CHF 2.40 to shareholders, which is an increase of 14% compared to the prior year. This represents a pay-out ratio of Already, it is evident that technology and demographics are 45% of adjusted net earnings, in line with the policy of a pay- transforming the labour market – changing where we work, out range of 40–50%. how we work, and how we support peoples’ careers. On a regional basis, we performed well, despite the different Education skills need to – and will – shift. The workers who will conditions in the more than 60 countries and territories in be most in demand are those with broad experience and flex- 4 Adecco Group Company Report 2015 Rolf Dörig Alain Dehaze Chairman of the Board Chief Executive Officer ible skills alongside a specialist education. The three stages of 2. Improving our EBITA margin to 4.5–5.0% on average. life – education-work-retirement – will end, and be replaced 3. Delivering an operating cash flow conversion of more than with a multistage life, full of many careers and a variety of 90% on average. transitions. Younger generations will postpone commitments, preferring to investigate and explore. Flexibility will be key. The These targets reflect the volatile nature of our business, which mature workforce may seek short-term employment opportu- is highly dependent on economic cycles. They are consistent nities to finance their transitions, or may need to learn new with our continued commitment to long-term value creation skills. and will push us continuously to improve structurally over time. The hardest challenge will be to anticipate the future world of Our compensation framework for the Executive team is work and exploit the new market opportunities. The Adecco aligned with the new targets. As of 2016, the long-term Group is very well positioned to take advantage of such incentive plan will be based entirely on performance, to be chances. How will we respond to these challenges? What are measured by relative total shareholder return. the opportunities for us as global industry leader, spanning General Staffing, Professional Staffing, and HR Solutions? On March 9, 2016, the Adecco Group announced that it has reached an agreement to make a recommended cash offer Providing answers to these questions and transferring them for the entire share capital of Penna Consulting Plc, a UK listed into action has been the focus of our Executive team.