Adecco : Q2 2023 RESULTS

AD HOC ANNOUNCEMENT pursuant to Art. 53 Listing Rules of SIX Swiss Exchange

Group press release, Zurich, Switzerland, August 4, 2022

Q2 22 RESULTS

Market share momentum, solid growth and margin

HIGHLIGHTS

• Revenues +4% yoy organic TDA1, up in all 3 GBUs
• Strong performance in Adecco APAC +14%, LHH Recruitment Solutions +12%, and Akkodis +14%
• Investment plan implemented with agility, driving relative revenue growth improvement in Adecco of +400 bps sequentially, in addition to +400 bps improvement in Q1
• Gross profit +7% organic yoy; Permanent Placement fees +38%
• Strong gross margin at 21.1%, +100 bps, driven by portfolio shift, positive mix and pricing
• Solid EBITA margin excl. one-offs of 3.5%, as anticipated, reflecting Adecco's investment plan and moderated contribution from LHH
• 100% ownership of AKKA; €20 million synergies secured for 2022, anticipating year-endrun-rate +€40 million
• June exit rate 4% and July volumes modestly above Q2 levels

Denis Machuel, Adecco Group CEO, commented:

"The Group made progress this quarter in several important areas - the Akkodis integration is fully on track and the combined business delivered healthy growth, Adecco improved its market share performance and showed some encouraging signs of turnaround in the US, and the LHH Recruitment Solutions business and digital ventures including Ezra and Hired continued to perform strongly. At the same time, it is clear that there is further opportunity for performance improvement to reach our full potential. In my first month as Group CEO I have spent considerable time visiting our markets, engaging with our operations, listening to our clients, and meeting with our people. I am convinced we have excellent businesses and fantastic people across the organisation. Identifying the levers and then executing on them to improve performance is my absolute priority. The Group continues to focus on executing against its strategy, delivering productivity improvements from the investments we have made, and growing our market share by being the partner of choice to our clients and the talent we serve."

KEY FIGURES

EUR millions, unless otherwise stated	Q2 22	Q2 21	CHANGE	H1 22	H1 21	CHANGE
			Reported	Organic			Reported	Organic
Revenues	5,938	5,263	+13%	+4%1	11,384	10,234	+11%	+4%1
Gross profit	1,254	1,057	+19%	+7%	2,405	2,055	+17%	+8%
EBITA excl. one-offs2	205	237	-14%	-23%3	390	444	-12%	-20%3
Operating income	124	211	-41%	-41%	270	393	-31%	-32%
Net income4	77	145	-47%		169	269	-37%
Basic EPS	0.46	0.90	-49%		1.02	1.67	-39%
Adj. EPS5	0.85	1.02	-17%		1.61	1.91	-16%
Gross profit margin	21.1%	20.1%	+100 bps	+70 bps	21.1%	20.1%	+100 bps	+70 bps
EBITA margin excl. one-offs	3.5%	4.5%	(100) bps		3.4%	4.3%	(90) bps
Cash flow from operating activities	-81	112	-193		-26	226	-252
Cash conversion ratio2					58%	64%
Net debt/EBITDA excl. one-offs2					2.6x6	0.5x

Unless otherwise noted, all growth rates in this release refer to same period in prior year. 1 On an organic and trading days adjusted basis. 2 For further details on the use of non-GAAP measures in this release, please refer to the 2021 Annual Report. 3 In constant currency terms. 4 Attributable to Adecco Group shareholders. 5 Please see page 12 for the description of this non-GAAP measure. 6 Adjusted for the acquisition of AKKA (Proforma).

Q2 2022 Results

2

Financial performance

Revenues

Second quarter revenues of EUR 5,938 million were up 4 percent organic and TDA (13 percent reported). Currency translation effects had a net positive impact of 250 basis points and M&A activities a net positive impact of 650 basis points. There was no impact from the number of working days.

At the Global Business Unit level, organically and TDA, Adecco revenues were up 3 percent (4 percent reported), LHH revenues grew 3 percent (5 percent reported), and Akkodis revenues rose 14 percent (87 percent reported, including AKKA's integration).

Compared to the prior year, in terms of service lines, Permanent Placement was up 36 percent organically (42 percent reported), while Outsourcing, Consulting & Other Services was up 22 percent (76 percent reported, with the large differential driven by AKKA's integration), Training, Upskilling & Reskilling services were 6 percent higher (12 percent reported) and Flexible Placement services grew 1 percent (4 percent reported). Strong performance in these services lines was partly offset by the counter-cyclical Career Transition services, which were 32 percent lower (19 percent lower reported).

Q2 REVENUES (CHANGE YEAR-ON-YEAR)
Group, by growth	Group, by Global Business	Group, by Service Line
driver		Unit
			Reported	Organic,		Reported	Organic
				TDA
Organic, TDA	+4%	Adecco	+4%	+3%	Flexible Placement	+4%	+1%
TDA	0%	LHH	+5%	+3%	Permanent Placement	+42%	+36%
Currency	+2.5%	Akkodis	+87%	+14%	Career Transition	-19%	-32%
M&A	+6.5%				Outsourcing, Consulting	+76%	+22%
			& Other Services
					Training, Upskilling &	+12%	+6%
					Reskilling
Group	+13%	Group	+13%	+4%	Group	+13%	+4%

Gross profit

Gross profit was EUR 1,254 million, up 7 percent organically (19 percent reported) in the second quarter period. Gross margin was 21.1 percent, up 70 basis points organically (100 basis points reported). Performance was driven by portfolio shift, mix and pricing.

On an organic basis, gross margin reflects expansion of 100 basis points in Permanent Placement, 50 basis points in Flexible Placement and 10 basis points in Training, Upskilling & Reskilling, countered by Career Transition, which was 60 basis points lower and Outsourcing, Consulting and Other Services, which were 30 basis points lower. Currency effects were 20 basis points positive and M&A 10 basis points positive.

Q2 2022 Results

3

Selling, General & Administrative expenses (SG&A)

SG&A excluding one-offs was EUR 1,060 million, 16 percent higher organically (29 percent reported, including AKKA as well as an unfavourable currency impact of 5 percent). The Group continued to invest in its growth capacity, particularly headcount additions in Adecco. On an organic basis, Full-time Employees ("FTEs") were up 16 percent year-on-year. Including AKKA, FTEs averaged 38,996 in the second quarter. The Group's network of branches stood at 4,485,

2 percent higher organically.

EBITA

EBITA excluding one-offs was EUR 205 million, compared to EUR 237 million in the prior period.

The EBITA margin excluding one-offs was 3.5 percent, 100 basis points lower year-on-year, as anticipated. Margin developments mainly reflect Adecco's investments in sales as well as a lower contribution from LHH. The FESCO Adecco JV in China contributed EUR 11 million, from EUR 5 million in the prior year period.

One-off costs were EUR 41 million, mainly due to AKKA integration and related costs that were recorded at the corporate level, as well as some property related charges in LHH.

Amortisation of Intangibles

Amortisation of intangible assets was EUR 40 million in the quarter, from EUR 17 million in the prior year period, with the difference primarily driven by the acquisition of AKKA.

Operating income

The Group generated an operating income of EUR 124 million, 41 percent lower, due to the afore mentioned performance drivers.

Net income and EPS

Net income attributable to Adecco Group shareholders was EUR 77 million, from EUR 145 million in the second quarter 2021. The result reflects lower operating income, interest expense of EUR 12 million, and other income/(expenses), net of EUR 11 million. Income taxes amounted to EUR 25 million, with an effective tax rate of 25.4 percent.

Basic EPS was EUR 0.46, 49 percent lower compared to the prior year period's EUR 0.90. Basic weighted-average shares outstanding were 167,117,863. Adjusted EPS, which is the Group's net income excluding a total EUR 65 million for amortisation of intangibles, one-off costs and exceptional tax items, divided by basic weighted-average shares outstanding, was EUR 0.85, 17 percent lower compared to the prior year period's EUR 1.02.

Cash flow and net debt

Cash flow from operating activities was negative by EUR -81 million in the quarter, compared to EUR 112 million positive in the prior year period. Cash flow was impacted by working capital increase to support the Group's growth and lower net income, due to the afore mentioned performance drivers. DSO was 53 days, 2 days higher on an underlying basis than in Q2 2021. The rolling last four quarters cash conversion ratio was 58 percent, compared to 64 percent in Q2 2021, a robust result reflecting normal working capital increase to support the Group's growth.

Net debt was EUR 2,829 million at end June 2022, from EUR 562 million at end June 2021. The Net Debt to EBITDA ratio, excluding one-offs and adjusted for AKKA was 2.6x, in line with management expectations. The increase is mainly related to acquiring full control of AKKA Technologies over the period. The Group remains firmly committed to decreasing its leverage over the coming quarters.

As a reminder, the Adecco Group issued EUR 1,500 million of senior and subordinated debt in H2 2021 at attractive terms to finance AKKA's acquisition. In addition, the Group has a robust financial structure, with fixed interest rates on 68 percent of its outstanding debts, no financial covenants on any of its outstanding debts, a well-balanced bond maturity profile and strong liquidity including an undrawn EUR 900 million revolving credit facility.

Q2 2022 Results

4

Global Business Unit results

Unless otherwise noted, all growth rates in this section refer to the same period in the prior year, with revenues stated on an organic and trading days adjusted (TDA) basis, and EBITA or EBITA margins stated excluding one-offs.

1. DECCO

EUR millions, unless otherwise					Revenues			EBITA margin excl. one-offs
stated
		Q2 22		Q2 21	CHANGE (yoy)		Q2 22		CHANGE
						Reported	Organic, TDA				(bps, yoy)
Adecco		4,443		4,264	+4%	+3%		3.6%		(110)
France				1,189	+5%	+4%				(80)
1,253	4.8%
Northern Europe		645	-6%	-5%		(80)
604	2.0%
DACH		377		364	+3%	+1%		0.2%		(360)
Southern Europe & EEMENA				986	+5%	+6%				(50)
1,031	5.4%
Americas		614	+6%	-4%		(300)
648	0.2%
APAC		466	+14%	+14%		+60
530	6.0%

Adecco's revenues grew 3 percent in the second quarter. APAC was very strong and Southern Europe & EEMENA and France were both solid. These positives were partly mitigated by lower results from Northern Europe and the Americas and modest growth in DACH. Flexible Placement revenues were flat compared to the prior year period. Strong growth in manufacturing, autos and hospitality & catering sectors was countered by continued headwinds from Mexico and in logistics, which on a combined basis hampered Adecco's revenue growth by around 4 percent. Revenue development in Permanent Placement was excellent, up 44 percent, and Outsourcing, Consulting & Other Services was a highlight, up 33 percent.

Gross margin benefited mainly from better mix and dynamic pricing. FTEs were up 19 percent year-on-year, and approximately 1,500 people were added relative to Q1 22. Over 50 percent of hires were in APAC, Adecco's strongest growth region. The 3.6 percent EBITA margin was lower year-on-year, as anticipated, mainly reflecting investments in headcount to capture opportunities in structurally growing sectors and geographies as well as fewer non-recurring benefits. The conversion ratio was healthy at 23 percent.

Adecco implemented its investment plan with agility during the quarter. The plan has delivered relative revenue growth improvement of +400 basis points sequentially in the second quarter, in addition to +400 basis points improvement in the first quarter period.

Segment results

Adecco France

• France delivered solid revenue growth of 4 percent in the quarter. Hospitality & catering, manufacturing and healthcare were strong, while logistics and construction were subdued.
• The EBITA margin reflects pricing and volume benefits as well as continued investment in headcount to drive future growth.

Adecco Northern Europe

• Revenues from UK & Ireland were 11 percent lower, considering a tough comparison period from exceptional contract wins in logistics in the prior period. Excluding this impact, revenues from the region were 4 percent higher. In the Nordics, revenues were up 4 percent, while in Benelux, revenues were 3 percent lower.

Q2 2022 Results

5

• The EBITA margin reflects positive gross margin development, investment in headcount and the absence of covid-related benefits recorded in the prior year period.

Adecco DACH

• Revenues in Germany were 4 percent lower. A rebalancing in healthcare and logistics was partially mitigated by strong growth in autos and manufacturing. Switzerland & Austria grew a very strong 15 percent.
• The EBITA margin reflects normal seasonality as well as business mix and higher FTE investment, particularly in white-collar and permanent placement activities.

Adecco Southern Europe & EEMENA

• Solid revenue growth was led by Italy, up 9 percent, and Iberia, up 6 percent, with manufacturing and food & beverages growing particularly well. The EEMENA region was 8 percent lower, challenged by a tough comparison in logistics.
• The EBITA margin reflects favourable solutions mix and pricing strategy as well as continued investment in headcount to support future growth.

Adecco Americas

• In Latin America, revenues were 1 percent lower, due to legislative change in Mexico having a negative impact. Excluding Mexico, revenues grew in high double-digit terms.
• In North America, revenues were 5 percent lower.

1. Revenue momentum in Adecco US improved for the second consecutive quarter, evidencing

traction in the US turnaround plan.

• 1. Qualitative improvement continued with key operational metrics such as visits/FTE, order fill rate and employee retention showing some encouraging signs.
• The EBITA margin reflects the ongoing turnaround in the US, as well as the absence of covid-related benefits.

Adecco APAC

• The region reported excellent revenue growth of 14 percent. Growth was broad-based, with revenues up 11 percent in Japan, 12 percent in Australia & New Zealand and 12 percent in India. Flexible Placement was strong, particularly in Australia and Japan, led by logistics, IT tech and consulting. Revenues were boosted by very strong growth in Outsourcing and Permanent Placement services.
• The EBITA margin reflects higher volumes and favourable solutions mix, a strong contribution from the FESCO JV, and meaningful investment in headcount.
• Around 750 FTEs were added in Japan to accelerate growth in blue-collar temporary placement, outsourcing and permanent placement activities.

LHH

EUR millions,			Revenues		EBITA margin excl. one-offs
unless otherwise stated
	Q2 22	Q2 21	CHANGE (yoy)	Q2 22	CHANGE
				Reported	Organic, TDA		(bps, yoy)
LHH	477	456	+5%	+3%	6.5%	(320)
Recruitment Solutions				+12%
Career Transition & Mobility				-31%
Learning & Development				+9%
Pontoon & Other				+11%