Adecco S.A. shares are registered in Switzerland (ISIN: CH0012138605) and listed on the SIX Swiss Exchange (ADEN). Adecco is a constituent of the Swiss Market Index (SMI), Switzerland’s most important stock market index, containing the 20 largest and most liquid Swiss stocks. Investor Relations Equity story The Adecco Group is the world’s leading provider increased our exposure to this higher-growth and higher-mar- of HR solutions, offering a wide variety of services including gin business and we took the lead in the counter-cyclical Ca- temporary staffing, permanent placement, Career Transition reer Transition (outplacement) and Talent Development (outplacement), Talent Development, outsourcing and other segment, where we achieve very attractive double-digit EBITA services. We have around 32,000 FTE employees and place margins. While our business offers operating leverage, we almost 700,000 people at work every day through a network limit financial leverage and will always aim to maintain our of around 5,400 branches in over 60 countries and territories. investment grade credit rating. The application of the ‘Economic Value Added’ (EVA) concept ensures that the interests of our Our core competences include providing flexible workforce solu- shareholders are met and that our daily decision-making tions and matching clients’ needs with candidates’ skills. In an processes are geared towards value creation. We have never environment of cyclical and seasonal changes in demand, we ceased to pay dividends to our shareholders over the past few help our clients to adapt their workforce needs accordingly. More years, even in economically very challenging times, and our customisation and made-to-order impact the production cycle dividend pay-out ratio has ranged between 25% and 30% of and reduce the predictability of our clients’ business develop- adjusted net earnings. Given Adecco’s solid financial position ment. We help our clients manage their business cycles by pro- and strong cash flow generation, the pay-out range was in- viding them with the required human resources with the right creased for the year 2011 and going forward to 40–50% of skills, at the right time. We help smooth seasonal impacts on adjusted net earnings. In addition, an enhanced dividend businesses through flexible workforce solutions allowing for rap- policy has been introduced. The Company is committed to pay id adaptation to peaks and troughs in demand during the year. at least a stable dividend compared to the previous year even Thanks to our global presence we can deliver geographic mobil- if the pay-out range is temporarily exceeded, barring seriously ity and organise work migration to match clients’ needs with adverse economic conditions. candidates’ skills to meet the diverse needs of labour markets. We are confident that we are in good shape to enhance our Our temporary and permanent placement businesses, which leadership position in the HR services industry. Based on the constitute over 90% of our total revenues, are cyclical and good progress on our six strategic priorities and more favour- dependent on the level of economic activity in the countries able economic conditions expected towards the end of 2013, where we operate. These businesses expand during periods we are convinced we will achieve our EBITA margin of above of economic growth and contract during recessions. On the 5.5% in 2015. other hand, our outplacement business, where we offer Ca- reer Transition services, is counter-cyclical and expands during Investor Relations The Adecco Group Investor Relations team difficult economic periods. Our profitability is dependent on focuses on providing transparent and consistent information the revenue level, business mix, country mix, pricing and the and interactive communication. We strive for an open dia- way we manage our cost base. While revenue development to logue with the financial community, the media and all key a large degree hinges on economic activity, we actively prac- stakeholders, to enhance understanding of the business as tice price discipline to optimise gross profit and we consistent- well as to explain the implied risks and opportunities. ly manage our cost base very strictly, to protect profitability in downturns and to deliver increasing returns in upturns. The Adecco Group is committed to providing regular updates on key value drivers, business strategy, threats and opportuni- Through past acquisitions we have improved our business mix. ties, as well as key ratios used by the Group to track its own Today we are also the leader in Professional Staffing, having performance. 36 Adecco Group Company Report 2012 Distribution of broker ratings in 2012* in % 100 80 60 40 Buy 20 Hold Sell Mar June Sept Dec * At quarter end. The Investor Relations team is dedicated to providing true, fair In addition, the Investor Relations section on the Adecco and up-to-date information to every interested stakeholder, so website, investor.adecco.com, provides the investment commu- that the share price reflects the inherent value of the Company. nity with a broad source of up-to-date information at all times. In addition to the release of our comprehensive quarterly re- Coverage Adecco’s share price development is closely moni- sults – which management discusses with the financial com- tored by the financial community. After reporting the Q4 & FY munity via a conference call and webcast – we also offer results for 2011, at the end of March 2012, 43% of the analysts meetings with management and Investor Relations at road- recommended to buy the stock, 48% had a neutral view and shows, industry or market conferences, and at our Headquar- 9% recommended selling. Peak confidence was reached in ters. In addition, we strive to ensure clear and transparent June 2012, after reporting strong Q1 results, which highlighted communication of other price-sensitive information through strong margin resilience despite organically declining reve- press releases and comprehensive content on our website. nues. 54% of analysts recommended to buy, 38% were neutral At the same time, we respect the legal obligations relating to and 8% recommended to sell the shares. A slowing European confidentiality and disclosure, and make every effort to guar- economy and an accelerating rate of revenue decline led to a antee equal distribution of price-sensitive information. more cautious view from the analysts’ side, resulting in down- grades during the summer months and early autumn. At the In keeping with this strategy, we maintained an efficient and end of September 2012, 44% of analysts recommended to buy open dialogue with the market through our Investor Relations the stock, 52% had a neutral view, while 4% of analysts rec- activities in 2012, devoting 47 days to market communication ommended selling. The year 2012 ended with 48% of the ana- around the time of our quarterly results releases. We partici- lysts being positive, 43% being neutral and 9% being negative pated in 8 broker conferences and 27 road-shows in Europe on Adecco shares. Continued margin outperformance and a and North America during 2012. relatively stabilising macro-economic outlook were the drivers behind this result. On September 19 and 20, 2012, we hosted our bi-annual Investor Days in Paris with a total of 90 participants. The theme of the event Currently 23 brokers are actively covering Adecco, maintaining was ‘leading HR solutions on a global scale’. We provided the fi- regular contact with Group management and the Investor nancial community and the media with an update on Adecco’s Relations team. They include: ABN Amro, Bank am Bellevue, strategy, financial performance and achievements, both from a Bank of America Merrill Lynch, Bank Vontobel, Barclays Capi- Group and segment perspective. The aim was also to explain the tal, Berenberg, Bryan Garnier & Co., Citigroup, Credit Suisse, progress so far in achieving the EBITA margin target of above 5.5%. Deutsche Bank, Exane BNP Paribas, Goldman Sachs, Helvea, While our CEO provided a strategic update and our CFO explained HSBC, Jefferies, JP Morgan Cazenove, Kepler, MainFirst, the financial performance and our potential, the event also fea- Natixis, Rabo Bank, Royal Bank of Canada, UBS and Zürcher tured presentations on Adecco’s operations in France, including Kantonalbank. our progress with the restructuring plan; on Lee Hecht Harrison (LHH), the global leader in Career Transition and Talent Develop- Dividend history The Company steadily increased its ment; on the Company’s business in North and Latin America, and dividend from CHF 0.60 for 2002 to CHF 1.50 for 2007, a level Adecco’s offering in Business Process Outsourcing solutions (which it maintained for 2008. Even during the severe recession in includes Managed Service Programmes and Recruitment Process 2009, thanks to the healthy financial position of the Company, Outsourcing, both run under the global brand Pontoon, and the Adecco was in a position to pay a dividend of CHF 0.75 per Vendor Management System branded Beeline). share, in line with the historical pay-out ratio of 25–30% of Adecco Group Company Report 2012 37 Adecco share price in CHF during 2012 60 55 Q4 & FY Results 2011 Q3 Results 2012 AGM 2012 Q2 Results 2012 50 45 40 35 Q1 Results 2012 30 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Adecco share price adjusted net earnings. For 2010 a dividend of CHF 1.10 per The Adecco share price increased by 18% from the trough in share was paid, equivalent to a 30% pay-out ratio based on early June to a level of CHF 43 by the end of July 2012. adjusted net earnings. For 2011, the pay-out ratio was in- creased to a range of 40–50% of adjusted net earnings and The Q2 2012 results showed an accelerating rate of decline in the dividend paid (CHF 1.80 per share) was the highest in the Adecco’s revenues, as a consequence of a slowing European company’s history.