Adecco : February 25, 2021 STRONG CLOSE TO AN UNPRECEDENTED YEAR

Results release

Q4 & FY 2020

STRONG CLOSE TO AN UNPRECEDENTED YEAR

Continued revenue recovery and leading margin performance

Q4 2020 summary and highlights

• • Revenues down 5% year-on-year organically1 and trading days adjusted (TDA); Japan & Rest of World returns to growth, and Europe and North America continue to recover

• • Gross margin up 30 bps yoy to 19.6% (up 50 bps organically), supported by strong performance of LHH (career transition), positive impact of Covid-19 employment support schemes, and pricing discipline

• • EBITA2 margin excluding one-offs3 at 4.8%, up 10 bps yoy organically, with good ongoing cost management

• • Revenues in January 2021 down 2% organically and TDA, with volumes in February indicating a similar trend

FY 2020 summary and highlights

• • Revenues impacted by Covid-19 crisis, down 15% yoy organically and TDA; showing consistent improvement since the trough in Q2 2020

• • EBITA excluding one-offs of EUR 709 million, with a margin of 3.6%, down 80 bps yoy organically; strength and balance of portfolio, GrowTogether benefits and agile cost management largely mitigated crisis impact

• • Strong cash flow and balance sheet with cash conversion of 123% and net debt/EBITDA excluding one-offs at 0.4x

• • Proposed dividend of CHF 2.50 per share and resumption of EUR 600 million share buyback

"At the beginning of 2020, few could have anticipated the challenges that the world would face. Covid-19 led to a health crisis and economic shutdowns that were unprecedented in recent history. The Adecco Group and my colleagues can be proud of the effectiveness with which we have navigated the crisis; maintaining business continuity, securing the wellbeing and safety of our associates and clients, and ultimately helping individuals and the economies in which we operate get safely back to work. I would like to sincerely thank our colleagues around the world for their efforts.

Despite the difficult market environment in 2020, financial performance remained resilient. After a sharp drop in Q2, we saw a consistent recovery in revenues through the second half of the year, as companies and individuals adapted to the new reality. We successfully pivoted towards growth areas, seeing more than 40% growth in e-commerce and logistics. Our digital capabilities and Onsite solutions contributed to market share gains across many geographies. As an essential service provider, we are playing an important role to support companies and individuals navigate the workforce transitions that have been accelerated by the crisis.

The Group remained solidly profitable, with an EBITA margin that was higher than during previous economic downturns, supported by our balanced portfolio, benefits from GrowTogether, and agile cost management. A rigorous focus on cash collection and our prudent capital structure helped maintain strong liquidity and a healthy cash flow and balance sheet. This allowed us to sustain important investments in IT and digital, and to uphold our dividend commitment.

Throughout the crisis we remained focused on our strategic priorities - perform, transform and innovate. In December, we launched our new strategy - Future@Work - building on the progress of the last strategic cycle and which is underpinned by our clear purpose, as one of the world's largest employers, to make the future work for everyone."

Alain Dehaze, Group Chief Executive Officer

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• 1 Organic growth is a non-US GAAP measure and excludes the impact of currency, acquisitions and divestitures.

• 2 EBITA is a non-US GAAP measure and refers to operating income before amortisation and impairment of goodwill and intangible assets.

• 3 In 2020, EBITA included one-offs of EUR 7 million in Q4 2020 and EUR 139 million in FY 2020; in 2019, EBITA included one-offs of EUR 36 million in

Q4 2019 and EUR 81 million in FY 2019.

Key figures overview

EUR millions unless stated

Summary of income statement information

Revenues

GrossWprofit EBITAWexcludingWoneQoffs EBITA

NetWincome/Zloss[WattributableWtoW AdeccoWGroupWshareholders DilutedWEPSWZEUR[ DividendWperWshareL

GrossWmargin EBITAWmarginWexcludingWoneQoffs EBITAWmargin

Summary of cash flow and net debt information

FreeWcashWflowOWbeforeWinterestW andWtaxWpaidWZFCFBIT[ FreeWcashWflowWZFCF[W NetWdebtV

DaysWsalesWoutstanding CashWconversionY NetWdebtWtoWEBITDANWexcludingWoneQoffs

Q	FY
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• 4 In Q4 2020, organic and trading days adjusted (TDA) revenues declined by 5%. In FY 2020, revenues declined by 15% TDA.

• 5 Dividend per share for 2020 as proposed by the Board of Directors, in CHF.

• 6 Free cash flow is a non-US GAAP measure and comprises cash flows from operating activities less capital expenditures.

• 7 Net debt is a non-US GAAP measure and comprises short-term and long-term debt less cash and cash equivalents and short-term investments.

• 8 Cash conversion is a non-US GAAP measure and is calculated as last 4 quarters of FCFBIT divided by last 4 quarters of EBITA excluding one-offs.

• 9 Net debt to EBITDA is a non-US GAAP measure and is calculated as net debt at period end divided by last 4 quarters of EBITA excluding one-offs plus depreciation.

FY 2020 financial performance

Group performance overview

The Adecco Group delivered a resilient performance in 2020, despite the unprecedented public health and economic crisis. While revenues declined, due to Covid-19, gross margin remained strong and EBITA margin was well protected, thanks to the strength and balance of the portfolio and agile cost management. Meanwhile, investments in the digitalisation and transformation of the Group were maintained, the 'Perform, Transform, Innovate' strategic cycle was brought to a successful close and the 'Future@Work' cycle was launched.

FY20 revenues were down 15% organically and TDA in 2020, as the global economy was impacted by the Covid-19 pandemic. After a decline of 33% TDA in April, revenues progressively recovered through the year to reach a decline of only 2% TDA in December, as the Group re-focused resources on areas of growth, such as e-commerce. Gross margin improved organically by 30 bps, supported by price discipline and strong growth in the higher margin LHH business. EBITA margin excluding one-offs declined 80 bps organically, to 3.6%, with the impact of the revenue decline offset to a significant extent by agile cost management and the benefit of structural productivity improvements from

GrowTogether. This resulted in a full-year organic recovery ratio of 47% (ratio of organic SG&A reduction to organic gross profit reduction).

Free cash flow was EUR 563 million and cash conversion was 123%, illustrating the resilience and partly counter-cyclical nature of cash generation. The Group's strong financial position and prudent capital structure allowed it to uphold its commitment to paying at least a stable dividend, even in a recession, distributing dividends of EUR 381 million in 2020. Net debt ended the year at EUR 376 million, representing a ratio of 0.4x ND/EBITDA excluding one-offs. The robust financial position and the continued recovery in trading performance allows the Group to propose a stable dividend for 2020, and to resume its EUR 600 million share buyback, which was paused at the onset of the Covid-19 crisis.

Q4 2020 financial performance

Group performance overview

Revenues in Q4 2020 were down 5% year-on-year (TDA), compared with a 15% decline in Q3 2020 and marking a strong rebound from the 28% decline of Q2 2020. The improved revenue trend reflected the Group's resilient and diverse services portfolio, despite the lockdowns impacting several major markets in Q4 2020. Permanent placement activity remained heavily impacted by the crisis, with revenues down 25% organically, while counter-cyclical career transition achieved strong organic growth of 19%.

Gross margin was 19.6%, an increase of 50 bps year-on-year organically, driven by the strength and diversity of the Group's portfolio, the positive impact from Covid-19 employment support schemes and pricing discipline. EBITA margin excluding one-offs was 4.8%, up 10 bps organically, with the positive gross margin development and agile cost management, enhanced by the GrowTogether programme, contributing to the resilient EBITA margin performance. Cash flow was strong, with cash conversion at 123% and DSO down 3 days year-on-year.

Revenues

Q4 2020 revenues were EUR 5,406 million, down 9% year-on-year on a reported basis and down 5% organically and trading days adjusted. Currency movements and divestments had a negative impact of approximately 2.5% and 2.0% respectively, while the number of working days had a positive impact of approximately 0.5%.

By service line, temporary staffing revenues declined by 5% to EUR 4,655 million; permanent placement revenues were down 25% to EUR 96 million; revenues from career transition increased 19% to EUR 102 million; and revenues in outsourcing and other activities declined 1% to EUR 553 million.

Workforce Solutions (Adecco brand) revenues declined 2%; Professional Solutions were down 17%; Talent Solutions and Ventures grew by 6%. All compared to the prior year and on an organic basis.

Gross Profit

Gross profit was EUR 1,060 million in Q4 2020, down 8% on a reported basis and down 2% organically. Gross margin was 19.6%, up 30 bps compared to Q4 2019. Currency and M&A each had a negative impact of 10 bps. Therefore, on an organic basis, the gross margin was up 50 bps: including positive contributions from temporary staffing (+70bps) and career transition (+30 bps), partly offset by permanent placement (-40 bps) and outsourcing and other activities

(-10 bps). Temporary staffing gross margin benefited from Covid-19 employment support schemes in North America, UK & Ireland General Staffing, with the full-year accrual of such benefits all recognised in Q4 2020; adding approximately 40 basis points to gross margin.

Selling, General and Administrative Expenses (SG&A)

SG&A excluding one-offs was EUR 802 million in Q4 2020, down 7% year-on-year on a reported basis and down 2% organically. Average FTE employees were 30,846, down 10% organically year-on-year. FTEs increased 5% sequentially compared to Q3 2020, in response to recovering business activity. The number of branches was reduced by 7% organically year-on-year. Q4 2020 reported SG&A included one-offs of EUR 7 million, comprising net restructuring

costs of EUR 2 million (including a positive impact from the reassessment of restructuring provisions in Germany for EUR 23 million) and acquisition-related costs of EUR 5 million. In Q4 2019, one-offs were EUR 36 million, of which EUR 32 million were restructuring costs and EUR 4 million were acquisition-related costs.

EBITA

EBITA in Q4 2020 was EUR 253 million, which included EUR 2 million from the Group's FESCO Adecco JV in China. EBITA excluding one-offs was EUR 260 million, down 2% organically. EBITA margin excluding one-offs was 4.8%, down 10 bps year-on-year in reported terms and up 10 bps organically. The organic recovery ratio was 75%. The conversion ratio10 of gross profit into EBITA excluding one-offs was 24.5%, down 70 bps on a reported basis and flat organically year-on-year.

Amortisation and impairment of Intangible Assets

Amortisation of intangible assets was EUR 20 million, compared to EUR 23 million in Q4 2019. Impairment of intangible assets amounted to EUR 9 million, linked to the November 2020 acquisition of Hired and the resulting strategic shift of existing digital business to the acquired technology platform. Impairment of intangible assets in Q4 2019 were

EUR 20 million.

Operating Income

The Group generated an operating income in Q4 2020 of EUR 224 million, compared to EUR 211 million in Q4 2019.

Interest Expense and Other Income/(Expenses), net

Interest expense was EUR 7 million in Q4 2020, compared to EUR 9 million in Q4 2019. Other income/(expenses), net was an expense of EUR 17 million. This primarily related to the held for sale provision on the planned majority divestment of Denmark, Slovakia and Croatia, as the Group implements its Future@Work strategy and streamlines its portfolio. This compared to an income of EUR 204 million in Q4 2019, which included a gain on sale of EUR 248 million relating to the divestment of Soliant.

Provision for Income Taxes

In Q4 2020, the effective tax rate (ETR) excluding discrete events was 32%, compared to 39% in Q4 2019. The reduction year-on-year was primarily driven by improved profitability in certain countries, which resulted in a re-evaluation of the full-year tax rate and a resulting true-up in the fourth quarter. In Q4 2020, discrete events had an unfavourable impact on the tax rate of 7%, resulting in an effective tax rate of 39%. In Q4 2019, discrete events had a favourable impact of 2% resulting in an ETR of 37%. The effective tax rate before discrete items for FY 2020 was 37%, compared to 35% in FY 2019.

Net Income/(Loss) Attributable to Adecco Group Shareholders and EPS

Net income attributable to Adecco Group shareholders was EUR 149 million, compared to EUR 256 million in Q4 2019. Basic EPS was EUR 0.92 compared to EUR 1.58 in Q4 2019. The year-on-year decline in reported net income was primarily driven by the favourable impact from the gain on sale relating to the divestment of Soliant in Q4 2019.

Cash Flow and Net Debt

Cash flow from operating activities was EUR 159 million in Q4 2020, compared to EUR 382 million in Q4 2019. Lower cash flow was primarily driven by investments in working capital, reflecting the recovery in business activity in the quarter. DSO was 49 days in Q4 2020, decreasing by 3 days compared to the prior year. The rolling last four quarters cash conversion ratio was 123%, compared to 93% in Q4 2019. Net debt was EUR 376 million at 31 December 2020, compared to EUR 462 million at 30 September 2020 and EUR 398 million at 31 December 2019. Net debt to EBITDA excluding one-offs was 0.4x, compared to 0.5x at 30 September 2020 and 0.3x at 31 December 2019.

10 Conversion raitio is a non-US GAAP measure and is calculated as EBITA excluding one-offs divided by gross profit.