Zurich (awp) – The personnel placement giant Adecco has retained the “Baa1” credit rating granted by the Moody’s agency. The outlook remains “stable” for the Zurich group.
In its considerations published Friday, the American agency expects a reduction in Adecco’s debt ratio to 2.7x by 2025, compared to the level of 3.3x at the end of June, considered “high” for this rating category. Moody’s states that this situation is due to the weakening of the personnel placement market, which is however expected to see a reversal over the next six months.
The implementation of the administrative savings program, which is expected to be completed this year, should make it possible to improve earnings before interest, taxes, depreciation and amortization (Ebitda). Adecco also benefits from a world number two position in its business and a solid operational performance diversified in geographic and sectoral terms. The group’s financial structure is solid, observes the agency. So many arguments that justify the “stable” perspective.
However, some risks weigh on the “Baa1” rating, notably the competitive and fragmented nature of the global personnel placement market, which presents relatively low barriers to entry. The growing automation of activities and evolving business models, as well as inflationary pressure, are also among the negative factors. Adecco is also suffering from low free cash flow generation, according to the release.
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