Adecco

Earnings summary this morning (05.11.) 👇🏼

Krones | $KRN (+0%) increases both sales and operating profit in the third quarter, with EBITDA growing by almost 22% to almost 135 million euros. The company confirms its forecast and benefits from improved material availability.

Uniper | $UN01 generates a profit of just under EUR 1.3 billion in the first nine months of 2024, but significantly less than in the previous year. The energy group confirms its outlook for the year with an expected net profit of EUR 1.1 to 1.5 billion.

Hugo Boss | $BOSS (+0%) recorded a slight increase in sales of 1% to 1.03 billion euros in the third quarter despite a slump in consumption in China, but EBIT fell by 7% to 95 million euros. The Group confirms its annual targets despite higher sales and marketing costs.

Fraport | $FRA (+0%) is lowering its expectations for passenger numbers in 2024 to the lower end of the range of 61 million passengers and is targeting EBITDA in the middle of the previous forecast of 1.26 to 1.36 billion euros. In the summer quarter, revenue rose by 11%, while operating profit only increased by 1%.

Fresenius Medical Care | $FRE (+0%) increases operating profit in the third quarter by 43 % to 463 million euros, which is attributable to successful cost savings. The company raises its forecast for adjusted operating profit, but expects a slight decline in sales.

Redcare Pharmacy | $RDC (+0%) reports a decline in adjusted EBITDA to 11.4 million euros in the third quarter and increases the loss for the first nine months to 20.1 million euros. The company confirms adjusted annual targets and expects a lower operating profit due to higher advertising expenditure for the e-prescription.

DHL | $DHL (+0%) reports a decline in profit of almost 7% to 751 million euros for the third quarter and lowers its forecast for operating profit in 2024 and 2026. Revenue increases by 6% to 20.6 billion euros, while EBIT remains stable at 1.4 billion euros.

Norma Group | $NOEJ (+0%) is revising its annual targets downwards and now expects sales of around EUR 1.2 billion and an adjusted EBIT margin of around 8.0 percent due to a challenging market environment. In the third quarter, the company recorded a decline in sales of 7.9% to 273.6 million euros and a drop in profit to 6.1 million euros.

Nintendo | $7974 (-2,55%)
Q2 24 Earnings:

- Net Income 27.70B Yen (est 49.4B Yen)

- Sees FY Oper Income 360.00B Yen, Saw 400.00B Yen

- Sees FY Total Switch Sales 12.50M Units, Saw 13.50M

Adecco | $ADEN (+0%) 24 Earnings:

- Net Income EU99.0M (est EU86.8M)

- Rev EU5.70B (est EU5.84B)

- Adj EBITA EU186.0M (est EU195M)

- Plans To Repay EU430M Debt Maturing In Dec 24

$ADEN (+0%) - Quarterly figures

Zurich (awp) - The Adecco Group's business remained challenging in the second quarter of 2024. The personnel services provider continues to expect challenges in the third quarter.

Specifically, sales fell by 2.6 percent to EUR 5.84 billion in the second quarter. Adjusted for exchange rate effects and the different number of working days, organic growth amounted to -2 percent year-on-year (Q1 2024 0%), according to a statement issued on Tuesday. In the run-up to the publication of the figures, analysts had expected an average organic decline of 1.3%.

In terms of business units, the largest business unit Adecco shrank organically by 2 percent, with particularly large declines in France and Northern Europe, for example. By contrast, things went well in Asia. Akkodis also shrank by 2 percent, particularly in North America, where the situation in the market for tech specialists remained difficult. Finally, the smallest division, LHH, shrank organically by as much as 7 percent.

Gross margin down

Gross profit fell by 6 percent to EUR 1.13 billion (previous year: EUR 1.24 billion) and the corresponding margin by 70 basis points to 19.4 percent. Adecco itself had forecast a gross margin on a par with the first quarter (Q1 2024 19.8%).

Adjusted for one-off effects, the operating result at EBITA level fell by 3% to EUR 179 million (previous year: EUR 184 million). The corresponding margin amounted to 3.1% after 2.8% in the first quarter and 3.1% in the same period of the previous year.

At the bottom line, the company earned EUR 58 million, 6% less than in the previous year. Adecco's performance was slightly worse than analysts had expected.

Market share gained

Group CEO Denis Machuel, meanwhile, was positive. Despite ongoing challenges and the tough price environment, the company has gained market share, achieved cost savings and improved its cash flow. "We are determined to continue to outperform the industry and gain market share," emphasized the manager.

"Rigorous" cost management should help with this. "And our proven ability to execute will put us in a position to benefit quickly when the labor markets recover," said Machuel.

Looking ahead, the company expects sales in the third quarter to develop at a similar level to the second quarter. The gross margin should improve sequentially in line with seasonality and costs should fall slightly compared to the previous year.

Savings target exceeded

As is well known, the Group is currently cutting costs. The cost-cutting measures for administrative costs continued unabated in the second quarter. The Group achieved concrete net savings of 162 million euros by the middle of the year, exceeding its savings target of 150 million euros compared to the base year 2022.

The greatest savings were achieved by simplifying and consolidating the Group's core functions (approx. 100 million). This was achieved, for example, by introducing offshore shared service centers for finance and HR or by reducing overlaps and redundancies in management structures at business division and country level.

In addition, around 65 million euros were saved in material costs. The Group now has a clear plan to keep administrative and overhead costs below 3.5 percent of turnover in the coming periods. This should help the company to be better positioned than its competitors. For the third quarter, the Adecco Group now expects a further slight decrease in administrative costs excluding one-off effects compared to the second quarter

Happy Investing

GG

Own position:

191 shares, at ø 31.91

1x short put 28.- (will be taken over if the price does not recover)

1x short call 32.- September

Plan: Write SC options between 30.- & 32.- on a 1-2 month basis (~ 1.5 - 2% option yield per 2 months & price yield (2/28 = 7.14%), hold either 191 shares or 91 shares long term.

$ADEN (+0%) - Recruiter, 1x with everything and sharp.

In the current economic climate in Switzerland, there are many reasons why recruitment agencies have a bright future ahead of them. Here are a few thoughts on this:

1. digital transformation:

Digitalization is advancing inexorably and many companies in Switzerland are desperately looking for specialists in the IT and technology sector. Recruitment agencies that specialize in these sectors can take advantage of the increasing demand for experts in areas such as software development, data analysis and cybersecurity.

2. skills shortage:

The skills shortage in Switzerland (unemployment 2.3% - 4.3%, depending on the calculation) remains a serious problem. Particularly in specialized sectors such as healthcare, engineering and finance, there is a huge demand for qualified workers. Recruitment agencies can play an important role here by helping companies to find suitable candidates that they might not otherwise be able to reach.

3. flexible working:

The pandemic has shown that home office and flexible working models are not passing trends. Many companies are increasingly focusing on remote working and flexible working hours. Recruitment agencies can position themselves here as experts who help both employees and employers to implement these new working models in the best possible way.

4 Demographic change:

Demographic change in Switzerland means that more and more experienced employees are retiring. This leads to an increased demand for young talent to fill these gaps. Recruitment agencies can help companies to manage the generational change smoothly and find the right young talent.

5. economic stability:

Despite global uncertainties, the Swiss economy remains stable. This stability creates confidence among companies and investors, which leads to continued investment and expansion. Recruitment agencies benefit from this environment as they can help to find the necessary employees for these growth phases.

$ADEN (+0%) The share price also has relatively strong support between CHF 28 and CHF 30. To buy the 100 shares, I sold a put at 28.00 for August and a call at 32.50 for September. As I already own ADEN, I am happy with both a temporary increase at 28 (if tendered, I will sell with 30-32 calls) and a sale of the acquired position at 32.50 (~profit of 9.3% = (32.50 + 0.35) / 30.06 ).

Let's Go!

GG

Underperformer still sold at a profit and used to build up cash ratios.