Adecco Group AG

We believe that larger players like Adecco are well positioned to benefit from long-term trends of increased flexible and temporary working staff, and expect margins to bounce back in 2021, as social distancing measures gradually ease across the world. Our stable outlook on Adecco reflects our expectation that the group will maintain broadly stable credit metrics over the next two years, despite the significant impact to the group's top line and a reduction in margins as a result of the COVID-19 pandemic. In addition, while Adecco typically maintains stronger credit metrics than we would typically associate with a modest financial risk profile, the ratings incorporate a degree of headroom to weather some volatility in credit metrics given its sensitivity to

...S&P Global Ratings' expects significant disruption in Adecco's operations from the COVID-19 outbreak over the next 12 months. We believe Adecco is more susceptible to cyclical downturns than peers in business services, due to its focus on the staffing industry, which would experience strong market headwinds from subdued economic activity, the closure of offices and industries, and the reduction of temporary staff as businesses rein in costs. Due to lockdown measures implemented by various countries to contain COVID-19, we expect overall revenue will decline by about 15-20% in 2020. While we expect that the increased share from the more countercyclical career transition segment and less cyclical outsourced HR services will provide support to preserve earnings, about 85% of total revenue is still linked to temporary staffing services. Adecco's credit metrics will remain commensurate with the rating, despite challenging market conditions. Despite a significant impact on earnings from COVID-19,...

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