Balfour Beatty PLC

LSE:BBY

Good day, and welcome to the Adecco Group Q4 and Full Year 2024 Results Conference Call. [Operator Instructions]

And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Benita Barretto, Adecco Group AG, Head of Investor Relations to begin the conference. Over to you.

Good morning. Thank you for joining the Adecco Group's conference call today. I'm Benita Barretto, the group's Head of Investor Relations and with me are the Adecco Group's CEO, Danny Machuel; and CFO, Coram Williams. .

Before we begin, we want to draw your attention to the disclaimer on Slide 2. Today's presentation will reference GAAP and non-GAAP financial results and operating metrics. This conference call will include forward-looking statements. These statements are based on assumptions as of today and are therefore subject to risks and uncertainties. A -- let me now hand over to Denie Machuel Denny for his opening remarks.

Thank you, Benita, and a warm welcome to all of you who've joined the call today. Before we begin the presentation, I'd like to refocus your attention on the brief video that we just shared. By leveraging Salesforce's technologies, including agent force and Data Cloud, we are enhancing our global talent supply chain, streamlining processes, improving fill rate and time to fill and delivering superior experiences for our job seekers.

We are building a group driven by innovation where is a key pillar. And I will share more on our digital and IT developments later in today's call. And let me open with the full year financial results on Slide 4. Revenues decreased by 3% year-on-year on an organic trading days adjusted basis to EUR 23.1 billion. Gross profit of nearly EUR 4.5 billion was 7% lower year-on-year. Gross margin contracted 80 basis points to 19.4%, a resilient result, reflecting firm pricing and volume and mix effects.

EBITA, excluding one-offs, was EUR 709 million 18% lower. The EBITA margin at 3.1% and 50 basis points lower year-on-year was resilient, driven substantial G&A savings and agile capacity management.

Importantly, it is within the margin corridor with the group delivering a recovery ratio of 44%. Moving now to the GBUs. In Adecco, revenues were 3% lower, a resilient performance given challenging markets. The EBITA margin was solid at 3.4%. In Adecco, revenues were 4% lower. The tech sector downturn continued to impact staffing and the EBITA margin of 5.5% mainly reflects this headwind. And in LHH, revenues were 6% lower, weighed by challenging markets and a high comparison in career transition.

EBITA margin was 6.3%, but within its margin corridor of 7% to 10% when excluding impact from general assembly that we will explain shortly. In sum, the group has delivered strong market share gains and resilient revenues and profitability in a challenging market environment. Let's now turn to Slide 5, which provides KPIs that evidence how the group has delivered on its simplified executed growth plan set out in Q4 2022.

Our market share growth is a testament to the success of the execution of our plan. Since introduction, we've achieved a relative revenue growth of 980 basis points with 200 basis point share gain in 2024 versus our key competitors. We are focused on further increasing our market share in the coming quarters.

We have continued to improve customer satisfaction. In the Adecco GBU, client NPS rose 2 points and candidate NPS rose also 2 points, cementing a multiyear improvement trajectory. This year's survey highlighted the speed of Adecco in selecting the right candidate profiles, the quantity of the candidates, the ease of the procedures and the friendliness of the people clients dealt with. And aligned with the simplification effort, the group's rigorous approach to overheads has now delivered EUR 174 million in G&A savings net of inflation, well ahead of the original EUR 150 million run rate target.

Let's turn to Slide 6, which shows in more depth the consistency in which we have delivered our stated ambitions. And as you can see on the slide, our achievements have been multifold. Regarding key highlights in 2023, the group adjusted incentive plans finalized its new operating model and established its partnership with Microsoft, focused on developing the group's AI architecture.

It began to deliver G&A savings and took 780 basis points of market share. In 2024, we made substantial progress. We accelerated the move to shared service centers for HR and finance and overachieved the G&A savings target. We outgrew competitors by a further 200 basis points.

Moreover, we introduced a comprehensive tech road map covering the next couple of years. We have enhanced our IT tools and solutions swiftly, better positioning the group to improve both recruiter efficiency and the customer experience materially.

Looking ahead, our operational focus areas include expanding MSP, advancing AI tools and solutions and introducing Advent AI to the business. We are committed to managing capacity with agility and rigorously focused on G&A savings, deleveraging and delivering market share gains.

On Slide 7, we provide client wins from across energy that encapsulate how the group is driving market share gains and growth. First, as part of our consortium, Adecco and accolades won a significant multiyear contract for the armed forces in the U.K. The team will develop a digital first and comprehensive recruitment solution. The client valued at Adecco's unrivaled workforce management expertise and Adecco's strength in systems integration and development.

Second, Pontoon won a large MSP contract with a leading technology company to manage its IT workforce across the U.S., Canada and India. The client required a reliable solution to address regulatory compliance, workforce visibility and operational efficiency, again, particularly valued Adecco's IT staffing expertise and Adecco staffing know-how at scale.

Finally, in LHH, EZRA expanded its collaboration with Microsoft to develop a leadership training program for Copilot adoption that supports organizational transformation. The client values EZRA technologies, which provide real-time feedback and are proven to make a measurable impact at scale.

Moving now to Slide 8. As we've highlighted, the group is steadfastly execution its strategy and is firmly committed to delivering on its financial targets. The balance sheet and financial structure remains sound, and leverage has not constrained the execution of the group strategy.

Notwithstanding the macroeconomic and the geopolitical environment has been unfavorable for longer than we had expected, which has prevented the group from deleveraging under the current dividend policy. The group's dividend policy was based on a 40% to 50% payout ratio on adjusted EPS with a commitment to hold the dividend per share at least in line with the prior year period.

Moving forward, the group's updated dividend policy will be based on a 40% to 50% payout ratio on adjusted EPS with no floor. The group reiterates its commitment to distributing excess capital to shareholders when leverage is below 1x. The updated dividend policy will accelerate deleveraging and increase financial flexibility.

It is well suited to a strongly cash generative yet cyclical business and it achieves a better balance between growth investment to support the group's strategic shift to higher growth and margin markets with direct distributions to shareholders. The immediate capital allocation priority is for the group to delever. And we target a net debt-to-EBITDA ratio at or below 1.5x by end 2027.

Accordingly, the Board proposes to distribute a dividend per share of CHF 1. This represents a payout of 42% within the group's 40% to 50% pay range. Let me now hand over to Coram, who will provide insight into this quarter's results.

Thank you, Denis, and a warm welcome to all of you who have joined the call today. Let's begin with Slide 10 and the group's Q4 results. Like the full year achievements, quarterly revenues and profit levels were resilient. .

The group delivered EUR 5.9 billion in revenues, 4.6% lower year-on-year on an organic trading days adjusted basis, and 3% lower on an organic basis. The gross margin at 19.2% was healthy, reflecting firm pricing, volume and mix effect. Productivity improved 1% year-on-year and G&A costs were reduced strongly by 14% year-on-year, supporting an EBITA margin of 3.2%.

And cash generation was notably strong. Cash flow from operating activities was EUR 491 million, an increase of EUR 174 million year-on-year as the timing effects we noted in Q3 unwound and the last 12 months cash conversion ratio was high at 109%.

Turning now to the GBUs on Slide 11. Adecco's performance was good in tough markets. Revenues were EUR 4.6 billion, 5% lower year-on-year on an organic trading days adjusted basis and 3% lower on an organic basis. By service line, flexible placement revenues were 3.5% lower.

Permanent placement was 1% lower, and outsourcing activities were up 5%. Although enterprise demand remained soft, SMEs grew 2% year-on-year. In sector terms, autos and IT tech were subdued, while manufacturing and logistics were soft. In contrast, growth was solid in retail and strong in food and beverages.

Gross profits were 3% lower, and the gross margin was stable, reflecting firm pricing. The EBITA margin at 3.4% mainly reflects volumes and business mix, partly offset with good cost mitigation efforts and higher FESCO income. Adecco continues to manage its capacity with agility, reflecting market share opportunities and rebound potential.

Slide 12 shows a decor at the segment level. In France, revenues were 10% lower in a tough market and weighed by lower demand from a handful of key clients. In sector terms, logistics and health care were notably pressured. France's EBITA margin of 4.2% mainly reflects unfavorable operating leverage.

Given the market backdrop, management has taken rightsizing action with head count reduced by a high single-digit amount. Revenues were 11% lower in Northern Europe, performing better than the market. Within the region, revenues were 19% lower in the U.K. and Ireland, 10% lower in the Nordics and 4% higher in BeLux.

Onetime items weighed the segment's margin. Excluding these, the underlying EBITA margin was 0.6%. Revenues in DACH were 11% lower and ahead of competitors. Germany was 14% lower and Switzerland, 6% lower. Manufacturing, logistics and IT tech were challenged and autos remained weak.

Southern Europe and EEMENA revenues were 3% higher. Iberia was up 10% and EEMENA up 13%, outpacing the market, while Italy was 3% lower. Logistics, food and beverages and retail were strong. The Americas revenues were 5% lower. LatAm was up 8%, with most countries growing in double-digit terms.

In North America, although SMEs grew moderately, revenues were 12% lower, reflecting the continued downturn in flexible placement demand and specific client headwinds. In APAC, revenue growth was solid, up 5%. Japan was up 7%, India, up 24%, and Asia up 8%. In Australia and New Zealand, revenues were 10% lower on a high comparison base.

Let's move to Slide 13, under. This was a quarter of solid execution given market headwinds. Revenues were 6% lower year-on-year on an organic trading days adjusted basis. Consulting and Solutions revenues were 3% lower, while tech staffing revenues were 11% lower. Revenues in EMEA were weak. France was 6% lower, reflecting subdued demand from autos and aerospace clients.

Germany was 15% lower, with the business facing strong headwinds from autos with many projects postponed or canceled due to budget freezes and pressure on utilization rates. Revenues in North America were 9% lower, weighed by the ongoing downturn in tech staffing, albeit sequentially improved.

Consulting and Solutions rose 31%. In APAC, revenues were solid, up 4% with Japan and China up 9%, reflecting strength in consulting while Australia was 8% lower due to continued headwinds in tech staffing. The 6.1% EBITA margin mainly reflects lower volumes and utilization, partly offset by G&A cost savings.

Last year's Q4 EBITA margin was flattered by onetime items, which we highlighted at the time. The underlying margin development was 100 basis points lower. The Consulting and Solutions margin was strong at 7.6%, rising to over 10% when excluding the German operations, which are currently in turnaround.

Now to Slide 14, an LHH. Revenues in LHH were 3% lower year-on-year on an organic trading days adjusted basis. Recruitment Solutions revenues were 8% lower, ahead of the market, if reflecting continued headwinds in professional talent markets.

Gross profits were 8% lower, improved from H1's minus 15% and Q3's minus 9%. Career transition was strong in the context of a high comparison with revenues 1% lower. Sequentially, revenues improved, and the pipeline remains solid.

Learning and Development revenues were 5% lower. EZRA performed well with revenues up 15% on a high comparison and a healthy order book. GA made good progress against its strategy. It is progressively exiting B2C while growing its B2B business, where revenues were up 48%.

Revenues in Pontoon were up 6%, led by 17% growth in direct sourcing. While MSP and RPO revenues remained soft, they have improved quarter-on-quarter throughout 2024 and the pipeline is healthy. The EBITA margin of 4.4% was impacted by charges for student loans in GA as we wind down the B2C activities.

Excluding this, the underlying EBITA margin was 7.4%, reflecting lower volumes, strong G&A savings and moderated investment in ventures. Let's return now to the group results on Slide 15. On the left, we review the quarter's gross margin drivers. On a year-on-year basis, and under the group's accounting policy is effectively -- effective January 1, 2024, currency translation and portfolio scope had a neutral impact.

Flexible placement had a negative impact of 30 basis points, mainly due to current geographic mix. Permanent placement had a 10 basis point negative impact, reflecting lower volumes while outsourcing, consulting and other had a 10 basis point negative impact, mainly reflecting lower utilization in Akkodis. Training, upskilling and reskilling had a 10 basis point positive impact, while the career transition impact was neutral.

In total, the gross margin was 40 basis points lower on an organic and reported basis. At 19.2%, it is a healthy result, reflecting firm pricing volumes and mix effects. On the right, we review this quarter's year-on-year drivers of the group's EBITA margin. For '23's margin of 4.3% was flattered by onetime items that we highlighted at the time, totaling around 30 basis points, giving us an underlying development of minus 80 basis points year-on-year.

Gross margin developments were accompanied by a 90 basis point negative impact from operating leverage as we selectively protect capacity partly mitigated by a strong 50 basis point positive impact from G&A savings. Moving now to Slide 16, which shows the group's strong cash generation and solid financing structure.

On a full year basis, cash flow from operating activities of EUR 707 million and free cash flow of EUR 563 million were both very strong. Net working capital developments reflect favorable customer collections with DSO at 52.8 days, improving 0.1 days year-on-year and favorable payables balances. Q4's operating cash flow was EUR 491 million, while free cash flow was EUR 446 million. Net working capital development was supported by an approximately EUR 100 million reversal of Q3's negative timing impacts and favorable payables balances.

DSO was best-in-class at 52.2 days, improving 0.4 days year-on-year. Finally, the full year cash conversion ratio was 109%, a significant improvement from 63% in the prior year. Management has rigorously focused on improving cash generation through disciplined net working capital management and by lowering CapEx and one-off costs. The chart evidences the delivery of these efforts. For example, CapEx in 2024 was EUR 144 million, down from over EUR 210 million.

One-off charges in 2024 were EUR 87 million, meaningfully below 2022 and 2023 levels, and we expect a further significant reduction in 2025. Turning to the balance sheet. In net debt-to-EBITDA terms, excluding one-offs, the group's leverage was 2.8x at year-end. And Q4 net debt was EUR 2,476 million, EUR 114 million lower year-on-year and ahead of management expectations.

Gross debt reduced by EUR 188 million in 2024, supported by the repayment of a EUR 430 million bond that matured in Q4. The group has a solid financial structure with fixed interest rates on 79% of its outstanding debt, no financial covenants on any of its outstanding debt and strong liquidity, including access to an undrawn EUR 750 million revolving credit facility.

The updated dividend policy will help accelerate deleveraging and increase financial flexibility. We remain firmly committed to deleveraging and now target bringing the net debt-to-EBITDA ratio to 1.5x or below by the end of 2027, absent any major macroeconomic or geopolitical disruption.

Let's turn to Slide 17. Strong progress delayering and simplifying the group structure and our relentless focus on growth and market share are driving changes in how the company manages and allocates its resources. Consequently, effective January 1, 2025, a new reporting structure has been implemented.

Given the close alignment of services and the group's strategic focus on MSP expansion, Pontoon's MSP and direct sourcing activities have been re-homed under the Adecco GBU President. Pontoon's RPO activities have been combined with LHH recruitment solutions to realize synergies and scale the RPO business.

The move in Pontoon's reporting structures will increase Adecco's revenues by approximately EUR 390 million and lower LHH's revenues by the equivalent amount. The EBITA margin impact is not material for Adecco, that LHH margin will rise by around 100 basis points.

Finally, Adecco's segments have been streamlined into 4 regions: France, EMEA, Americas and APAC. Before the Q1 results, the group will provide re-reported GBU and segment disclosure that reflects these changes. Let's turn now to Slide 18 and the group's outlook.

Volumes were stabilizing throughout Q4 and have shown improving momentum in early 2025. For Q1, the group expects gross margin to be higher sequentially, in line with normal seasonality and SG&A expenses, excluding one-offs, to be broadly flat sequentially. We are continuing to focus on G&A savings whilst positioning sales and delivery capacity to capture market share and accelerate into recovery. And with that, I'll hand back to Denis.

Thank you, Coram. And on our next few slides, we'll focus on some of the key priorities that are driving improved financial performance. We first focus on how we drive performance across our GBUs, starting with Slide 20 and a deep dive on Adecco U.S. .

Management has stayed the course with its turnaround strategy despite challenging markets. This slide sets out some of the many achievements made in 2024 across 3 key focus areas: branch revitalization, customer expansion and cost optimization. The team have improved the profitability of 96 branches and the branch network delivered a strengthened average fill rate of 80%. As proof of progress in a down market, our SME revenues were up through the H2 period.

Overall, 2024 revenues grew 390 basis points ahead of the American Staffing Association Market Index. And the sales pipeline now stands at very high levels. Moreover, Adecco U.S. made over 1,400 client wins on a net basis in 2024, including substantial wins, particularly in the food and beverage sector. There's still much work to be done. But the turnaround has good traction.

Looking forward, we anticipate that Adecco U.S. will return to year-on-year revenue growth in the first half of 2025. Moving to Slide 21, when we take a closer look at Akkodis. We have selected a new leader for the GBU and Jan Gupta will step down from his role and the group's Executive Committee. We want to acknowledge the key role that Jan played in shaping modes and in the successful integration of Akkodis and model, creating a world leader in ER&D technology consulting.

In 2024, Consulting and Solutions revenues were EUR 2.6 billion, showing a growing 1% year-on-year, in line with competitors. And the Consulting and Solutions EBITA margin was 6.1% weighed by Germany, which is currently in turnaround. But excluding Germany, the segment delivered a healthy margin of around 8%. Akkodis has very strong foundations. And under new leadership, will accelerate the implementation of Akkodis' consulting and solution strategy with a focus on key levers.

Operational excellence, strengthening the business technology practices, significantly expanding offshore capabilities, delivering the German turnaround and increasing our consulting footprint in key geographies, such as the U.S. and China. Small bolt-on acquisitions will support the strategy. Akkodis recently acquired Ryland Compliance Partners in the U.S. to bolster its life sciences and health care capabilities. It also acquired Barhead solutions in Australia to enhance its Microsoft technology solutions expertise.

In accelerating performance, we expect Akkodis to deliver higher growth and bring EBITA margins into the 7% to 10% GBU corridor. Let's turn to Slide 22 and an update on how the group is building a GenAI-powered business. The group is upgrading its foundation by consolidating and simplifying technology landscape. We will leverage this foundation to accelerate investment in innovation to support the profitable growth of the Adecco Group.

In particular, the group is building an ultra-efficient talent supply chain. Processes are being automated end-to-end with GenAI technologies and AgentiKI to improve efficiency further. The group plans to fully leverage local and global delivery assets, such as existing branches and career centers and meaningfully expand its on and offshore recruiting and rehabs.

Progress has been substantial during 2024. We have equipped 25,000 recruiters with our recruiter GenAI suite. More than 36,000 candidates were placed through the Adecco's digital platform globally, supported by higher fill rates, revenues from clients serviced by our diesel platform were 9% higher that revenues from our global accounts. And 19,000 candidates have benefited from LHH's AI-powered career canvas.

Our swift progress is supported by key strategic partnership with Salesforce, Bullhorn and Microsoft as the video played earlier today shows. In summary, the group's AI strategy will drive efficiencies, productivity and competitive edge. It will create a differentiated experience for customers with enhanced human centricity.

And let me now wrap up today's presentation with Slide 23 and our key takeaways. The group achieved relative revenue growth of plus 200 basis points in 2024, demonstrating its ability to gain market share despite challenging market conditions. We exceeded our G&A savings target, delivering EUR 174 million net of inflation by year-end, while selectively protecting sales and delivery capacity to capture market share and accelerate into recovery.

We delivered very strong cash generation, reflected in the 109% cash conversion ratio. And we are accelerating the adoption of AI technologies to revolutionize the recruitment process and build a competitive edge. The group has updated its dividend policy to accelerate deleveraging and increase financial flexibility and management remains focused on delivering our strategic priorities with rigorous execution and a commitment to achieving our financial targets.

Thank you for your attention and look forward to answering your questions. Operator, we can have the first question.

[Operator Instructions]

And your first question comes from the line of Afonso Osorio from Barclays.

A few from me, please. The first one, obviously, on this dividend decision. Can you expand a little bit on that and what may you conclude that this was the right level for the dividend this year? And how should we think about next year and the year after in terms of progression for the dividend?

And then secondly, in U.S., can you also explain a little bit on your assumptions for growth in the country in the first half are seeing you're planning to grow positively in the first half. So your assumptions there are quite helpful. Is that broadly market share gains? Or is it a function of the broader market to recover in the first half, '25? And then just lastly, on France. I mean, I believe you reported loss of market share in the country for a few quarters now. So just wondering if the -- what are the drivers of that? And how are you thinking about growth in France going forward?

Thank you, Afonso. And I'll start with the dividend. So in a nutshell, we have a solid strategy. We are rigorously executing on it. We're focused on profitable growth. We have a solid financial structure. However, clearly, the macroeconomic environment, the geopolitical environment haven't helped and haven't have prevented us to delever as the speed at which we wanted under the current dividend policy. So this was the right time to adjust the policy to help us accelerate deleveraging to bring additional financial flexibility and to have a better balance between profitable growth investments into higher growth markets, into higher-margin markets and of course, the distribution to our shareholders.

We are a strong cash generative business and also a cyclical business. So the adjustment of this policy comes at the right moment.

And let me just pick up. This is Coram. Let me just pick up on the point about how we landed on the amount. I mean, as Denis said, this updated dividend policy strikes a good balance between shareholder returns, deleveraging and growth investment. And obviously, our short-term priority is deleveraging. This frees up EUR 250 million of cash to help us delever. The policy itself is based on 40% to 50% of adjusted EPS. That means it moves in line with earnings. And clearly, we are at the lower end of our margin corridor right now.

And we are absolutely confident that we can drive margins profitability and earnings up over time. And obviously, the dividend will move up in line with that.

Now turning to the U.S. We are pleased with what we see from our turnaround plan. There has been sequential improvement, particularly in Adecco U.S. I mean the big ticket item there is Adecco U.S. The rest of the business, career transition is solid, and it's second highest revenue in its history.

Recruitment solutions in LHH is still like performing ahead of the market, but still down. And Akkodis staffing is still in line with the market which is down. Consulting is growing 30%, which is very encouraging. It has good traction. Now Adecco U.S., which was the problem child, if I may say so. We see an improvement quarter-on-quarter on our performance. We still had some large client impact in the quarter that have weighed on our performance. However, we are very positive about the impact of our turnaround plan on our results.

We've seen an improvement in our branch profitability. And we have now almost 100 branches that have improved their profitability. At the end of 2025, we will have nearly more than plus 40% in number of branches versus 2 years ago. So we are investing there, and it shows because the small and medium markets has grown 1% this quarter. It's the second quarter in a row where we grew versus starting the year at minus 7%. So we see traction there, and this will continue.

The large client losses are behind us, and we have some large wins through MSPs or directly with Adecco that will support growth moving forward. On top of that, the Pontoon spend with Adecco has increased 13%. So Pontoon is driving more volumes to Adecco.

We've also built a strong nearshore delivery engine. We've seen productivity GP per selling FTE improving 3% and good sign of how our clients appreciate what we do. We have an NPS strongly improving. At the end of the day, when we look at the performance versus the American Staffing Association Market Index, we have -- we are in Q4, 400 basis points ahead of that index. So that shows positive traction. On the market side now, we have seen in the U.S. temp volumes since the beginning of the year, improving -- slightly improving week after week.

We are much more cautious about term permanent recruitment, which is still very soft. So we see better traction in temp soft in perm, which give some, let's say, some ideas of a possible positive momentum moving forward. However, as I said, given what our traction in SMEs, what we do in large clients, we are positive that over the H1 will achieve growth in revenue year-on-year.

Now France, France is -- let's be clear. France is still a tough market. And of course, there are difficult economic and political situation. There is still uncertainty there. And we've been facing headwinds, particularly with our top 3 clients that are still in negative territories. However, and we also had a change in legislative environment in health care that have impacted our Q4.

However, we've seen a good traction in the next 20 clients, not the top 3, but the next 20, where we are positive year-on-year. So we are closing the gap with the market. We're gaining market share in construction. Our perm business is up 5%, which is positively surprising, I would say. And we had some large wins in Q4. So France will remain a market -- a difficult market, let's be clear. We are protecting margins. We're producing bottom line. We are executing a restructuring plan as we speak, with a high single digit in percentage of people reduction. We are adjusting selling FTEs. And we have also put a new leader in place to improve performance. He will focus on branch productivity, execution of our time, supply chain, speed up delivery and the MSP development. So France will remain a somehow difficult market, but I'm positive in the footprint that we're going to have in this country.

Your next question comes from the line of Remi Grenu from Morgan Stanley.

So the first one, I would like to come back on the comments you're making on the outlook. Can you help us reconcile a little bit that comment on improving momentum? And weak data we have seen so far for staffing markets like France, Germany and the U.K. Is that improvement you're referring to driven by any specific regions? And should we assume that the divergence between Northern and Southern Europe continues from here? So the first question. The second one is on working capital. So clearly, better DSO, but also significant in from payables. So I know you flagged that you had EUR 60 million of timing -- positive timing effects on payable. But can you help us understand what are the drivers for the remaining payable inflow? And if it means that we could see any offsetting impact in Q1 any payments falling into Q1 rather than Q4?

And then the third one is on deleveraging, helpful to get a little bit more visibility. Can you elaborate a little bit on the assumptions you've made regarding the timing or the timing for the inflection and the pace at which the volumes are going to improve from here, not really as a guidance, but much more as a way for us to assess going forward, whether you are ahead or slightly below and that base for deleveraging the balance sheet?

Thank you, Remi. I will take all 3 of those. So on your question to begin with about the outlook, I absolutely understand the point you're making. To be clear, the shape of the business that we've seen in Q1 is similar to what we saw in 2024. In other words, we are seeing markets in LatAm, APAC, Southern Europe, continue to grow, whereas, for example, in Northern Europe, in France, in the U.K., in Germany, they continue to be down, and they continue to be challenging markets.

Overall, the point that we're making about momentum is around the weekly volumes. And what we have seen from the beginning of the year is a very modest improvement every week on volumes across a broad number of countries. It's not changing the overall shape of where the pressure is and where the growth is. But it is interesting to see every week, we see a modest improvement in volumes across a significant number of countries. And that's the point that I think we're trying to make about momentum.

It is relatively broad-based. On working capital and cash, obviously, we were very pleased with the Q4 performance, which is EUR 170 million, up on Q3. And we're obviously also very pleased about 109% cash conversion ratio that we delivered for the full year. There's really 3 drivers of the cash performance. So in Q4, the positive reversal of the EUR 100 million of timing effects that we flagged in Q3. Part of that was AR, a bigger chunk of it was accounts payable. And just to be clear on this accounts payable in 2023, the timing of that AP was very heavily weighted towards Q4.

We had something of a backlog that had built up on payables. And that means that in comp terms, it hurt us in Q3 '24, but it benefited us in Q4 '24. I think there are 2 other things that are driving the cash performance for the full year. The first is really, really strong management of DSO. We are 0.4 days improved in Q4 at 52.2 days, and that is despite pressure in the market on terms.

I think we're all seeing that. But we've done a really good job of managing this, and we are now clearly best-in-class in terms of DSO. And I think the third thing you should factor in on the full year cash is that, obviously, with a top line that has declined, you know the working capital profile of this business, we tend to see a working capital release.

So I think when you put all 3 of those together, that explains both the Q4 and the full year cash performance. What's it going to look like in 2025? Well, we will continue to focus on net working capital, particularly around DSO and payables.

Obviously, it depends on the shape of the year, and in particular, on growth because if we see a little bit of growth, then that will absorb working capital. But the other thing I'd remind you is that on free cash flow, we've done a good job of managing CapEx. We'd expect it to be about GBP 160 million in 2025.

And our one-off drop considerably from EUR 87 million in '24 to around EUR 30 million is what we're forecasting in '25. So I would expect solid cash generation in the year. Obviously, the conversion will depend on growth, and we will deleverage year-on-year in '25 as a result of the pieces that I've just described, plus the EUR 250 million benefit from the updated dividend policy.

I'm not going to make a prediction on Q1. It is typically a seasonal outflow. It's one of our leased cash-generative quarters, and there's always timing effects on some quite big balances on both receivables and payables. So -- but we are expecting solid cash generation in '25 and clearly deleveraging.

On the question around how to get to at or below 1.5x net debt to EBITDA. Obviously, there's a variety of factors that affect this. So what happens to the top line, what we do on costs and therefore, margin and also cash conversion. If I were to boil it down, then I think you should think of this in 1 of 2 ways, either modest top line recovery, and I'm talking low single digits here, which drive operating leverage and productivity and, therefore, margin or margin expansion into the middle of the 3% to 6% margin corridor.

And if we did not see top line growth, then you'd expect us to adjust capacity and take cost out and drive margin. Either of those will get us to the 1.5x net debt-to-EBITDA target. Both of them would get us there faster. So I hope that gives you a sense on how to think about this, given that there are a variety of different drivers.

Yes. And just one housekeeping question on what's the level of leverage at which you would consider returning excess cash. Is it still 1.5? Or maybe I think I heard you mention in 1x?

It's actually always been 1. So we've not changed that aspect of the capital allocation policy. Our target for leverage is to be at or below 1.5x. And we have a clear commitment that if we're below 1x that we will distribute excess capital and we normally do that for our buybacks. .

Your next question comes from the line of Simona Sarli from Bank of America.

Yes. I have just one last. If you could please elaborate a little bit more on your guidance of SG&A sequentially flat in Q1? So if I consider seasonality, it should actually be down sequentially. So is there an element of being conservative here? Or what are the moving parts?

I think Coram would be very happy to answer this one.

I'll take that one. Actually, Simona, if you look at what's happened to SG&A typically from Q4 to Q1, there's usually a seasonal uplift in absolute terms usually EUR 10 million to EUR 15 million. Now we do have, as we flagged some charges in GA in Q4, which went through SG&A. And that's why we're guiding to broadly flat sequentially.

Longer term, obviously, we adjust capacity on an agile basis around selling depending on what we see in the market, and we continue to focus on making sure that we are keeping our G&A savings firmly under control, below 3.5% of revenues. And there are still some pockets that we can go after. I'm not flagging another program along the same lines that you saw us deliver the EUR 174 million, but there are a couple of pockets that we can go after in certain territories, and we will continue to do that. Obviously, that will come later in the year. That doesn't affect our Q1 guidance.

Your next question comes from the line of Andy Grobler from BNP Paribas Exane.

Just a couple from me, if I may. Firstly, just on Germany, you talked around or talked about the turnaround within the Akkodis business. What assumptions are you making about the automotive industry as you plan that turnaround in terms of how bad that could be over the next 1, 2 or 3 years? And then secondly, just on AI, sorry to bring that one up again. You talked about the opportunities. It was interesting to see that one of your peers put AI as a material risk. What are your thoughts about some of the headwinds that may come from AI as well as some of the opportunities?

Thank you very much, Andy. Nice to talk to you. So on Germany, definitely, this kind of -- overall, the Akkodis business is solid, the pain point at the moment is Germany, mainly due to 2 things. One, the auto business, as you rightly mentioned, we had projects that got sold, some were stopped, some were delayed. .

This has created a lower utilization rate, bench management, et cetera. That's one thing. There was also -- to just further clarify, we were in Germany, too much exposed to legacy technologies. And we talked in the past about this move from legacy technology into smart industry. And this is what we're executing moving into digital engineering and AI, but that piece is still a bit too small.

And as we were shifting the auto crisis hit us. So we have a turnaround action plan. It's in progress. We brought an additional new leader to help us accelerate. We have -- we are optimizing a center of excellence. We have a new organization being in place -- being put in place, which is going to be more client-centric.

So all these things are good. However, we will need, given the exposure that we have to autos a bit of a more supportive environment. So it's difficult to say exactly at which moment things are going to pick up. What we know what we hear from our clients. And let me be clear, we still have excellent relationship with our clients.

I mean the lags of the BMW and Mercedes and VW are -- I mean, key clients, they really appreciate what we do. Just as you know, they are in a difficult situation. What they're -- moving forward, what we see, it's probably more into 2026 onwards is they will do more outsourcing the need to reduce their workforce, and they're doing it, as you know. And they've been very clear that it would expect partners like us to really accompany them with efficiency and outsourcing of larger projects.

So I don't expect any move, any positive move in 2025. But moving forward, I am really strongly positive in how we can develop further partnership. At the same time, we're also diversifying. We see good traction on the defense sector. The aerospace also is promising. Life science is also getting some traction. So we are all hands on deck, adjusting the bench, diversifying and staying very, very close to the auto sector to be seen as the partner that will help them on their efficiency program, and that's what they're asking us, and it's an opportunity for us.

Now on AI. We've been -- we started all our GenAI initiatives very early on. We learned a lot. We streamlined a lot of things, thanks to GenAI. Internally, we see -- we have 4 pillars to our GenAI action plan. We've -- from this initial sort of discovery 2 years ago, we're now much more focused, we go deep and we scale, which means that helps us streamline our processes and automate.

And we've chosen a few battles, recruiter efficiencies and candidate experience LHH career canvas, as we mentioned, as a coaching and a few others. But we go really -- we don't spread our effort, we focus it and we scale. We have great strategic partnerships with Salesforce on Agentic AI in Data Cloud with on the search and match with Microsoft on the infrastructure and on Copilot.

We train our people, and we also have a jewel, which is Akkodis research, which is really a very advanced in how they help us progress on GenAI. We've been working with our agents in Akkodis since spring 2020. So this is very solid. Now on the market, very, very hard to know, which direction it's going to take. Of course, there's going to be disruption as we had with when digital came in.

What I must say is because of the effort and the focus that we have, I think we are very well placed to capture every single opportunity. I'm very confident in our GenAI strategy. It would also is disrupting the job organization in our clients, that's an opportunity for us because they will need to try, they will need to upscale, they will need to do internal moves, et cetera, and we are here to help.

We see great traction in how we train, thanks to our Akkodis Academy into GA. Akkodis Academy focuses on training engineers general assembly focuses in B2B side or non-engineers. So we have very focused offering went to train lawyers, for example, to try and accountants on how they have to embark into GenAI. So I see GenAI much more as an opportunity than a risk. The risk exists, of course, but we are embarking boldly on that revolution as we call it.

Your next question comes from the line of Suhasini Varanasi from Goldman Sachs.

Just one left from me, please. You've discussed gross margins, which can be sequentially higher in 1Q versus 4Q. But I think it was a bit of disappointment versus your -- in Q4 versus your initial guidance, which you had given at the time of Q3 results. Can you maybe help us understand what's going to drive this improvement sequentially, especially given still a little bit weak?

So just to be clear, the gross margin right now, we think, is healthy, given the environment in which we're operating. Pricing has remained firm. Our spread between bill rate and pay rate is up in the 12. The multiplier is positive. And so we are protecting pricing whilst still as you've seen gaining share pretty consistently. The impact on gross margin is really twofold. It's the ongoing pressure in perm, and it's the particular mix of where the growth is coming from in the Adecco business.

Neither of those is structural. Both of those are really driven by the market conditions that we see. In terms of what drives the sequential improvement, there is always a small sequential improvement between Q4 and Q1 gross margin. It's usually around 10 basis points.

And it's simply about the weight of the business. It's that the seasonality, particularly in the Adecco business, means it's the softest quarter. So it has an impact on the group gross margin. In terms of the trends that we would expect to see, very similar to Q4.

So in Q1, no real impact from FX or M&A. We'd expect to see perm broadly flat because that has been going for a number of quarters, and so the comp effect is unwinding. We'd expect to see maybe 10 basis points of year-on-year pressure from career transition just because it's coming off a record year.

It's still strong. About another 10 basis points year-on-year, simply because of the pressures on utilization rates. Let's also flag that our utilization rates in the Consulting and Solutions business are good, still, they're at 91%. So we're protecting those. And then Flex, I think, will be about minus 30 to minus 40 year-on-year.

However you triangulate it, whether you look at the plus 10 bps seasonal effect or you take those trends and apply them Q1 '24 to Q1 '25, you'll get to around 19.3%, 19.4%, and that's where we're guiding to.

Your next question comes from the line of Rory McKenzie from UBS. .

It's Rory here. First question on the cost base. Can you give more detail on the sales actions in Q4 and where you've landed ahead of plan on the G&A savings? And also, are there any other Q4 cost movements that we should be aware of, like lower bonus accruals or restrictions perhaps? And then related to that, do you think you can stay within your target 3% to 6% margin corridor for FY '25? Just this year, land at 3.1% and and given the profit growth rate, I guess, deteriorated over the year, you kind of face a weak exit rate. So I was interested to hear you don't think there are many more large programs to come.

Let me take those, Rory. I mean, on G&A, as I think we've talked about previously, we've been very effective driving that G&A savings program, EUR 174 million of savings versus a target of EUR 150 million. It's very broad-based. All of the GBUs contributed. There were significant savings at corporate, and it's really about making sure that we're delayering and streamlining the organization.

So all parts of the business contributed to that. And our G&A expenses at the end of the year were at 3.4% of revenues, which is very lean. G&A FTE is down 8% in Q4. In terms of notable cost movements in Q4, I mean, we have flagged the 1 item, which is unusual, which is the costs of the wind down of the B2C business in general assembly. We took that above the line. And just to spend a moment on that, we are exiting the B2C business. It's part of our strategic focus on B2B, which is growing very nicely.

As we've seen across the industry in B2C education, there have been challenges in collecting some of the loans that were made to students in previous models to pay for the education. And we've taken a very thorough look at that loan book, we've cleaned it up. And that is a cost that was in Q4 that won't repeat in Q1. And that really brings me back to the answer I gave earlier about the sequential movement on SG&A because normally, you see SG&A rise by EUR 10 million to EUR 15 million between Q4 and Q1. The reason we're broadly flat is obviously ongoing discipline around G&A, capacity management and then the absence of those GA costs.

And then on the 3% to 6%, I mean, I think it's important the exit rate is not weak. It is stabilizing in Q4. And as we flagged, we are seeing improving momentum in our weekly volumes in the first 2 months of 2025. Overall, shape hasn't changed. But every week, there's a modest improvement in volumes in -- across a number of different countries. We are very focused on making sure that our G&A savings stick. And as I said earlier, there are a couple of pockets where we can go for further G&A. Denis has mentioned some of the turnarounds, for example, in France and the U.S., there are opportunities in both of those territories for further G&A reductions. And they will come later in the year. We're very focused on delivering that. So we are very confident that we will stay within our 3% to 6% margin corridor.

And one final pipe that I will make, our recovery ratio in 2024 was 44%. Now that's a good recovery, but it's not quite at the 50% that we targeted previously, and that's because we have protected capacity in our sales organization so that we can make the most of a recovery when it comes. And I think that's important because that means you'll get good operating leverage on the way up.

Yes. That was definitely getting about drop-through ratio question. So thanks for anticipating that. .

I figured that's where you were going.

Your next question comes from the line of Konrad Zomer from ABN Amro.

The first one is on your new organizational structure. Can you give us a few specific advantages or synergies that you'd likely achieve from moving Pontoon RPO into LHH, please? And my second question, you sound quite a bit more optimistic in today's call and in today's press release than in the previous few quarters.

So having said that, can you tell us what you think will happen to your head count into 2025? Because I think you did an excellent job in 2024 by reducing costs, partly by reducing head count. Is this the time to protect head count? Is this the time to further shed people that you expect markets seem to have stabilized quite a few different regions?

I'll take the first one, Conrad, and thanks for your questions, and Coram will take the second one. On Pontoon. Pontoon had to had really 2 components: a recruitment component and a MSP component, managed service provider. And if you look at that, there was not so much synergies between the 2. And.

We believe that hosting the recruitment business, the RPO business, in that LHH makes more sense because LHH has this sort of advisory positioning on workforce management, particularly for white powder and managers, et cetera. So deals directly with CHROs on topics like your strategy, how you can accelerate.

So putting the recruitment process outsourcing is much more strategic decisions that CHRO will make or talent acquisition people. So that really creates a better home for that business. On the other side, on the MSP side, there was too much, I would say, of a connect what what we do with MSP and the way MSP can feed the Adecco business.

So yes, they're still run a separate because some of the MSP business is run as vendor neutral. So we have to keep it separate. But there is 1 leader. And that 1 leader Christoph, who runs the overall Adecco and Pontoon business is there to make sure that wherever we can, we know the MSP piece really brings all this the best of Adecco. And so those synergies, this collaboration between the 2 is very efficient. So -- and we've already seen traction.

We've won some very large contracts, thanks to a perfect alignment and collaboration between the 2. So rather than having 2 separate entities, 1 leadership, 1 direction great synergies, great collaboration, and this is already getting traction. As I was mentioning, I think in the U.S., we've already seen the MSP, the Pontoon business driving 13% more business into Adecco in its spend. So more to come on this. but that was a logical thing to do.

And Conrad, let me pick up on your point out head counts. I mean if I look at Q4, then year-on-year, our head count was down 6% and 2% sequentially. Within that, as you rightly identified, there is -- there has been more head count reduction in G&A. So that was down 8% year-on-year, while our selling head count was down 5%. And so to deliver those savings, we have very deliberately targeted head count reductions in G&A.

And I think, as you say, we've been very effective at overdelivering versus our target. In terms of what I'd expect going forward, obviously, there continues to be a focus on relentlessly managing our G&A costs.

Again, I'm not flagging another big program. But as I've mentioned, we do think there are further pockets that we can go after. So I would expect later in the year for there to be modest reductions in G&A head count.

And then on the selling side, we're really managing this on a country-by-country basis. We have taken head count out in some of the more difficult markets. We protected head count where we can see signs of a recovery, and we've added head count where we can see signs of growth that we can go after, and we will continue to do that.

It's the reason why, as I mentioned to Rory, the recovery ratio is at 44%, a little bit lower than the 50% we normally guide to because we're deliberately protecting capacity, and it means we will get good operating leverage in a recovery. So I think you should expect us to continue to manage selling head count on a very dynamic basis.

Your next question comes from the line of Simon LeChipre from Jefferies.

Three questions, please. First of all, just on your Q1 outlook, I mean, in which extent this is conservative enough in case trends turn softer again in the coming weeks? Secondly, just a follow-up on your comment around further adjustment of FTE. I mean, how can you really reconcile this with your commentary on like consistent volume improvements across the board? I mean, yes, some color would be helpful.

And lastly, just on France and what kind of impact can we expect from the exceptional tax contribution in 2025? Any color on the cash impact?

Thank you, Simon. And I'll take the first one and Coram take the next 2. Let's be clear. We have seen volumes stabilizing in Q4. We still have and we will see growth momentum in APAC and LatAm and probably Southern Europe, but Europe will remain a difficult piece. We have some large businesses like France, like Germany, U.K., Nordics, DACH that are in a difficult position from a macroeconomic perspective.

So we have as we said, and we've been -- we just tell you what we see. And we see that the temp volumes have been trending positively in a variety of countries, including the U.S. What's interesting, while The TEMP business is softly growing, the per business is very soft, okay? In the U.S., the perm business is minus 8%.

We are still ahead of competitors, but it's very soft, okay? So that says something probably around companies being a bit more positive when you see some -- a little bit of improvement and you bring in 10 people, you don't dare yet to recruit permanently.

So that's where we've got to be cautious about what we say. We believe that there is a bit of momentum. We remain cautious but this momentum is encouraging. Back to the U.S., we've seen job order volumes increasing in Akkodis U.S. We've AdeccoAdecco so we've seen some temp improvement across several others. So -- we're not done. We are not calling it a recovery, but we see some sort of a little bit of a positive trend.

And picking up on your other 2 questions, I don't see an inconsistency between modest volume improvement and the dynamic approach that we take to managing our sales capacity. So we manage sales head count according to what we see in the markets.

Clearly, if this momentum continues. Then as we've said, we've protected a degree of capacity to help us capture it. And if it becomes a strong recovery, then obviously, we would invest where we see opportunities to capture growth. So there's an inconsistency in any of that.

On France, so there are 2 components to the French tax changes. There is a corporate tax surcharge and there is effectively the reversal of the planned reduction in business tax, we have built that into our tax guidance. So it's about 150 basis points on the group ETR and it is in operated within the 34% guidance range. It is not a big driver of cash. I mean in absolute terms, this is less than EUR 10 million. So I don't think it has a big impact on cash.

Okay. Just a quick follow-up on the U.S., your exposure in terms of group revenue, it's like a bit less than 15%. Is it a fair assumption?

In terms of revenue percentage for the U.S.?

Yes.

Yes. Yes, that's about right. That's about right.

A bit less.

Your next question comes from the line of Jon Mark from Zika Bank.. Life, despite the probably weaker top line that we saw for December over the last 2 years, what are some of the key reasons for him leaving? And why did you mention the replacement of him already today?

And second question is you mentioned also with your dividend cut now that you want to keep financial flexibility. Of course, I think the key reason is to deleverage. But is it also possible that you are keeping some dry power for some near-term M&A?

So regarding Akkodis and Jan Gupta, first of all, we love that business. It has an immense potential. We have great assets. And as you heard in the call, we are extremely positive in the way Consulting and Solutions is developing. We've been growing 1% this year. We have healthy margins and the tax staffing is ready for a rebound.

So we love that business. And as far as Yan's departure, I think it was very logical moment. Jan has been absolutely instrumental into sort of creating modes out of a variety of businesses in the group, putting it together then strategically moving ahead and accelerating the ER&D positioning thanks to the acquisition of Akko and then integrating ACA successfully. So we're very grateful for what Jan has done.

It was time for both of us to move to the next phase. And we have recruited a great leader who has an extensive experience in running large businesses in the IT sector and the digital engineering sector. And large also experience in running offshore operations. So he's a great guy, highly-energetic, great background we cannot announce his name because of constraints on where he is at the moment. We will announce very shortly, but we respect, of course, his current environment. So we will announce his name very shortly.

And then on the second question, obviously, moving to the updated policy of a payout ratio of 40% to 50% of adjusted EPS with no floor does give a better balance between growth investment and shareholder returns. It does give greater financial flexibility, but the immediate priority is deleveraging, and that's why we have confidently put the target of at or below 1.5x net debt to EBITDA by the end of 2027, you would expect us to continue to do small bolt-on deals.

You saw 2 of them announced in Q4. These do not fundamentally change the balance sheet, but they're good deals where we get swift returns, and we will continue to do those. But the immediate priority is delevering the balance sheet and achieving our target.

Your next question comes from the line of Simon Van Oppen from Kepler Cheuvreux.

First of all, congratulations on the strong cash flow performance in Q4. First of all, thank you for the additional disclosure on the Akkodis Consulting and Solutions business, will this also be reported on a quarterly basis going forward. We would highlight, and we will highly encourage this. .

Secondly, could you provide some long-term insights in what you expect in terms of net improvement in your EBITDA margins coming from AI? And lastly, what are your expectations for the outplacement business going forward?

So I think on the disclosure on Akkodis, Coram and then I'll take the..

Yes. So I mean, obviously, the segment that we report on is Akkodis and that's the way that it's set up because of the way that we manage the business. We have, as you know, Simon, typically given good color into what's happening on the tech staffing business, what's happening on the consulting and solutions business, how that varies by country and also the sort of profitability characteristics.

So I'm glad that you appreciate it. It's building on what we've already been doing, and we will continue to do so. And just one other point for me. Thank you for your comments about the cash flow because that's appreciated.

And as -- we really love that Akkodis business, a great asset, great perspective, very strong client portfolio. So this is very, very promising. It's -- so as far as AI is concerned, definitely, we believe that this will help us accelerate our trajectory to contribute to getting to our -- the top of our margin corridor.

Definitely, we see two things. There is the way it's going to bring efficiency into our operations. We've already brought GenAI, as I said, in several things with our recruiters but also with our lawyers. We use a tool to really help our lawyers be more efficient. So there's much more things to come there.

And we also believe that this will help us take a different angle with our clients. The strategic workforce management question is going to be more and more live into our clients' organization. And because of the power that we have with the massive data that we have. We capture data at scale. Every day, we introduce we interview immense number of candidates every day. We connect with our clients constantly.

So that massive amount of data will help us create progressively additional business model or different angles in terms of how we create value for our clients. So I am very positive that this will contribute to margin improvement. On the CT business, we are -- let's be clear, we're very pleased with the performance. It's a very strong team. They have incredible momentum. And despite the low decrease in revenue, as I said earlier, it's the second highest revenue in history coming from a very, very high top line last year in 2023. So we have a very solid pipeline. We see some layoffs still coming in in Europe, still in the U.S.

And we are also expanding particularly in the U.S. on the small and medium enterprise segment, which is -- which was not really explored and we have, for the moment, a great traction. So we're positive on the way things are going in CT. We still believe we have reasonable levels of revenue. We also are improving the customer experience, both on the client side and also on the people that are -- that benefit from the outplacement experience. We've digitalized. We've put generative AI, career canvas is core to our offer now.

It helps really scale the offer, but also provide the people with a different experience, broader understanding of the opportunities that they have ahead of us, career guidance at scale. So that's a promising business moving forward.

So on the -- just coming back on the EBITDA margins, you are targeting a long-term EBITDA margin of 5% to 6%. Am I correct?

So we have been very clear that we operate in a corridor of 3% to 6% and we would expect to be in the upper half of that range in a supportive economic environment. And to be clear, it's EBITA margin, not EBITDA. Obviously, EBITDA is higher than that.

And I think to emphasize Denis's point, longer term, these tools will drive productivity, both in the back office and the front office. So it is one of the tools in the toolkit for driving the margin up.

Your next question comes from the line of Karen from JPMorgan.

Just 2 left on my side. The first one is on your new reporting structure. Could you maybe talk a little bit about the rationale behind the changes, especially around the formation of EMEA combining North and Southern Europe and DACH into the segment and your thoughts around providing details around kind of the key markets going forward?

And then the second question is on Slide 5, where you highlighted that you are 200 basis points ahead of competitors around the share gains. I think this was 290 basis points in the first 9 months for 2024 at your Q3 results, if I understood it correctly. So I was wondering if you could clarify what the driver of the change here is for Q4?

Let me take the reporting structure question, Karen. I mean, the -- ultimately, our segmental reporting is driven by the way that we manage the business. So we have to mirror the segments for the management structure. And as you know, we have been streamlining GBU structures. We've been making sure that we are as lean as we can be in terms of the managerial structure. So Adecco has now moved to effectively 4 key leadership segments that sit underneath the main GBU.

And therefore, we have to report in this way. In terms of color and disclosure going forward. And I think you can see from the way that we present existing segments like Northern Europe, for example, we always do try to unpack what's happening within those broader segments. We try to give you the color by country in terms of growth and margins, and we'll continue to do that.

So the structure is driven by the way that we manage the business, but we will continue to give you the color that you need to understand what's within those groups. On in terms of the calculation of the market share, and then I think Denis will pick up.

Yes. First of all, we are pleased on the market share gains that we've done over the year. 200 basis points, which was on top of 790 in last year. So of course, the bar was higher this year and particularly towards the end of the year where we had a very high comp base.

The way we calculate it is we do a simple average with the 2 main competitors. So it is -- the 200 basis point is a full year calculation. In Q4, we were ahead of 1 competitor, but behind another, and it's better than Q3, where we're behind both. So that's where we are.

Your next question comes from the line of from Kepler.

All my questions have been asked. So there is no need to. I just want to highlight that we really welcome the delevering efforts, and Simon said, the good cash flow. So keep up the good work. Thank you very much.

Thank you. We really appreciate that. Thank you. We are very focused on this.

Absolutely. So I understand there are no more questions. So it's time to wrap up this call. I would like to thank you again for attending. In a nutshell, we are rigorously executing on our strategy. We believe the strategy is the right one, and we are rigorously executing on it.

We are committed to deleveraging. And this will be supported by our new adjusted dividend policy. I am very confident in our future perspectives, given the proven capacity to execute, given our unique positioning with this great portfolio of GBUs, Adecco, Akkodis with a new leader, LHH, great portfolio of services, really resonating well with our clients and the portfolio of countries. We are on a path of growth. We believe in profitable growth, of course, supportive economic environment will help, but we are building a great future for our group. Thank you again for attending this call and looking forward to our interactions to come, and of course, to our next results call. Thank you very much. Have a great day.

That does conclude our conference for today. Thank you for participating. You may now all disconnect.