p. 1

annual report 2010

[close]

p. 2

revenues in eur billions ebita in eur millions net income attributable to adecco shareholders in eur millions 299 722 611 735 495 8 423 employees fte year-end in thousands 20.4 21.1 20.0 14.8 18.7 828 1,081 908 35 37 34 28 32 06 07 08 09 10 06 07 08 09 10 06 07 08 09 10 06 07 08 09 10 key figures over 32,000 full-time-equivalent employees · over 700,000 associates on assignment daily · over 100,000 clients every day · over 5,500 offices in more than 60 countries and territories · 2010 revenue split by geography in france 30 north america 19 uk ireland 9 japan 7 germany austria 7 benelux 5 2010 ebita split by geography in operating units france 27 north america 22 uk ireland 3 japan 9 germany austria 10 benelux 5 italy 5 iberia 3 nordics 5 australia new zealand 1 switzerland 5 emerging markets 5 italy 4 iberia 4 nordics 4 australia new zealand 2 switzerland 2 emerging markets 7 2010 revenue split by business lines in office 20 industrial 48 information technology 11 engineering technical 5 finance legal 4 medical science 2 sales marketing events 2 human capital solutions 1 emerging markets 7%

[close]

p. 3

share price performance comparison 2010 in chf 70 60 50 40 jan feb mar apr may june july aug sept oct nov dec adecco basket of competitors 1 smi 1 share information tickers swx europe bloomberg reuters isin aden aden vx aden.vx ch0012138605 share price in chf · · · year-end average high/low 61.25 56.46 66.15/46.22 historical data for the years in eur million except shares 2010 2009 2008 2007 2006 statement of operations data revenues gross profit ebita2 net income attributable to adecco shareholders other financial indicators cash flow from operating activities free cash flow3 net debt4 key ratios as of revenues gross margin sg&a ratio5 ebita margin per share figures basic eps in eur diluted eps in eur cash dividend in chf number of shares basic weighted-average shares diluted weighted-average shares outstanding year-end 18,656 3,329 722 423 14,797 2,649 299 8 19,965 3,673 908 495 21,090 3,927 1,081 735 20,417 3,546 828 611 455 350 751 477 385 110 1,054 948 617 1,062 971 866 747 662 556 17.8 14.0 3.9 17.9 15.9 2.0 18.4 13.8 4.5 18.6 13.5 5.1 17.4 13.3 4.1 2.20 2.17 1.106 0.04 0.04 0.75 2.82 2.71 1.50 3.97 3.80 1.50 3.28 3.14 1.20 192,113,079 195,596,325 174,702,026 177,606,816 177,613,991 174,079,431 175,414,832 184,859,650 174,188,402 185,107,346 195,279,053 182,647,293 186,343,724 196,532,960 184,836,462 1 smi and basket of competitors manpower randstad and kelly services market capitalisation weighted in chf relative to adecco s share price 1.1.2010 chf 57.05 2 ebita is a non-u.s gaap measure and is defined herein as operating income before amortisation and impairment of goodwill and intangible assets 3 free cash flow is a non-u.s gaap measure and is defined herein as cash flow from operating activities minus capital expenditures 4 net debt is a non-u.s gaap measure and comprises short-term and long-term debt less cash and cash equivalents and short-term investments 5 excluding amortisation of intangible assets and impairment of goodwill and intangible assets 6 proposed by the board of directors.

[close]

p. 4

contents 6 10 17 27 35 51 54 59 67 75 company report letter from chairman ceo interview with the ceo our business strategy and kpis market overview business review risk management brand management our people ­ our strength our corporate responsibility share information financial review adecco group operating and financial review and prospects selected financial information consolidated financial statements report of the statutory auditor on the consolidated financial statements financial review adecco s.a holding company financial statements proposed appropriation of available earnings report of the statutory auditor on the financial statements major consolidated subsidiaries corporate governance applicable corporate governance standards structure shareholders and capital board of directors executive committee and compensation further information remuneration report remuneration principles details of compensation elements glossary 92 111 112 158 160 173 174 176 178 178 186 199 204 207 216

[close]

p. 5

the adecco group we inspire individuals and organisations to work more effectively and efficiently and create greater choice in the domain of work for the benefit of all concerned as the world s leading human resource services group ­ a business that has a positive impact on millions of people every day ­ we are conscious of our global role.

[close]

p. 6

dear shareholder in a year of generally improved economic conditions the adecco group achieved strong results and profited from previous measures to structurally optimise the business we are proud to report solid profitable growth and an industry leading performance the value of flexibility in human resources has increased in the recent downturn and is becoming an essential part of our customers competitiveness equally individuals increasingly value a partner in the quest for on-going employment rewarding work and careers demand for our services recovered strongly throughout 2010 our revenues increased by 26 12 organically1 to eur 18,656 million thanks to our price discipline and the support of the higher-margin professional staffing acquisition of mps group included in our results as of february 2010 we achieved a gross margin of 17.8 the combination of solid top-line growth strict price discipline and tight cost control resulted in strong operational leverage consequently our ebita1 rose to eur 722 million an increase of 142 or 34 adjusted1 and organically the ebita margin increased to 3.9 from 2.0 in the prior year operating income amounted to eur 667 million and net income attributable to adecco shareholders was eur 423 million we generated operating cash flow of eur 455 million a good result when considering the increased working capital needs to fund the strong growth in revenues in the light of this solid performance and the sound financial position the board of directors proposes an increased dividend of chf 1.10 per share for 2010 1 please refer to page 36 for an explanation of the terms organic ebita and adjusted.

[close]

p. 7

patrick de maeseneire chief executive officer rolf dörig chairman of the board of directors the 2010 results reflect a group-wide commitment to a clear strategy geared towards achieving our mid-term ebita margin target of above 5.5 our increased exposure to professional staffing the leaner branch network and optimised delivery channels are paying off the integration of mps group progressed well during the course of 2010 and the business performed above our initial expectations both in terms of revenues and profitability we are well on track to complete the integration in 2011 and will even exceed the initially targeted synergies of eur 25 million the integration of spring group which we acquired in october 2009 was successfully completed at year end 2010 and the targeted synergies of eur 13 million were slightly exceeded we also strengthened our operations in important emerging markets in india we crossed the threshold of providing more than 100,000 associates with work on a daily basis in china we established a joint venture with beijing foreign enterprise human resources service co ltd fesco one of the leading hr service companies in a market with huge growth potential the shanghai-based joint venture fesco adecco operational since january 2011 already has over 100,000 associates on assignment every day and gives us access to a network of more than 100 branches throughout china with an established local and multinational client base adecco group company report 2010 7

[close]

p. 8

most notably our strategic commitment to a distinct dual market approach in general staffing and professional staffing is proving rewarding the acquisition of mps group made us the worldwide leader in professional staffing on the other hand our general staffing business showed strong performance especially the industrial segment with revenues growing 22 in 2010 we will continue to develop our general staffing business in 2011 maintaining cost leadership and optimising the delivery models at the same time we now have a solid platform to further grow the professional staffing business also on an organic basis our focus on value creation through the systematic application of the eva concept within the adecco group remains a key strategic pillar and should enable us to continue delivering strong cash flows in the future continued commitment to our strategy will pay off in a market set for significant growth the downturn instigated a structural shift towards temporary staffing in office industrial and professional segments and proved the value of a more flexible workforce companies with a higher share of temporary employees were better able to respond to the sudden drop in demand we believe that penetration of temporary staffing will increase and reach new peaks in many mature and emerging markets hr flexibility is becoming pivotal not least in the manufacturing sector where a more `made to order low inventory level has become prevalent also on-going regulatory changes such as the opening of the construction the healthcare and public sectors to temporary work in spain create growth opportunities above all in mature markets with ageing populations and mismatches between education systems and labour markets skills shortages will become commonplace despite high unemployment 8 adecco group company report 2010

[close]

p. 9

as a group we are united behind our strategy we have six strategic priorities to ensure our continued profitable progress improving retention of talents continuing to invest in standardising it systems to improve efficiency and operational effectiveness strengthening our lead in the higher-growth professional staffing segment further segmenting our general staffing business with specialised delivery models addressing different skill groups strengthening the lead in managed services provider and recruitment process outsourcing services and enhancing our leading market development in the emerging markets that have enormous growth potential we are a disciplined growth-oriented group with a strong focus on profitability that is well positioned for the future and we are on course to achieve a mid-term ebita margin of above 5.5 thank you to every employee for their continued commitment to you our shareholders for your loyalty and to all of our valued clients and associates for their trust in the adecco group rolf dörig patrick de maeseneire chairman of the board of directors chief executive officer adecco group company report 2010 9

[close]

p. 10

reaching new peaks interview with patrick de maeseneire ceo the six mid-term strategic priorities for the group were launched a year ago can you give us an update we made good progress on all six retaining our talents as the economy further picks up will be key for the whole adecco group investments in it were accelerated in 2010 and we continue to invest in 2011 with the acquisition of mps group we became the world leader in professional staffing the increasing trend of globally active companies to outsource hr processes resulted in several contract wins for us in the managed services provider/recruitment process outsourcing space and finally we will further optimise the segmentation within our general staffing business as well as enhance our leading position in emerging markets adecco reported a strong performance for 2010 when will you reach the mid-term ebita margin target of above 5.5 we have used the downturn to sharpen up for the future we took advantage of the economic crisis in terms of m&a and invested in professional staffing with the structural measures taken to improve the business and with the higher exposure to professional staffing we are very well positioned to take advantage of the economic upswing and to further strengthen 10 adecco group company report 2010 our leading market position in both general and professional staffing we achieved solid revenue growth in 2010 and with price discipline and tight cost management operational leverage was very good we do not speculate on when we will reach this goal but we are fully committed to reaching our ebita margin target in the mid-term you have chosen your team the six strategic priorities and the mid-term target are aligned with the board of directors what s next i have a broader executive committee so that all of adecco s markets are represented this enhances the successful execution of the group s strategy together we have more than 100 years of staffing industry experience it s a great team to work with and our task now is to further implement our strategy and to reach our mid-term target what trends are you observing for 2011 we see a clear trend in that large global companies increasingly outsource the management of part or all of their contingent workforce spend to a managed services provider msp we observe the same trend for the management of permanent employees where companies outsource all or part of their hr functions as recruitment process outsourcing rpo the aim is to reduce the number of suppliers and to optimise the workforce spend

[close]

p. 11

the recent downturn has proven the value of a more flexible workforce and how is adecco positioned to take advantage of this trend at adecco not only do we have a comprehensive msp/rpo service offering but we also possess a leading vendor management system vms called beeline the vms is used to manage the contingent workforce spend for a given customer and offers remarkable transparency on candidates and suppliers in what ways and to what extent has the latest economic downturn spread the concept of temporary work do you expect to surpass prior peaks in terms of penetration rates the recent downturn has proven the value of a more flexible workforce simply put companies with a higher share of temporary employees were better able to respond to the sudden drop in demand there is ample evidence of more just-in-time production these days in order to maintain low inventory levels this also results in an increased need of companies for flexible staffing levels the declining inventory to sales ratio in the last decade as witnessed across multiple sectors in the us is evidence of this trend and we expect this to continue to drive demand for our services this together with further deregulation sociodemographic changes and the move of production to the east will in our view lead to new peaks in the penetration rates in many countries how do you see the regulatory environment changing in the next few years will doors open or close for the industry and why generally speaking more flexible labour markets lead to higher penetration rates for temporary staffing in the eu countries the agency work directive effective as of december 2011 foresees the lifting of all restrictions related to temporary work the most recent liberalisation happened in spain during 2010 where the construction the healthcare and the public sectors are now open for temporary staffing in france the public sector was opened up to temporary staffing during 2009 besides the professional staffing business do you also see opportunities for profitable growth in general staffing absolutely our clear focus is to further segment our offering in general staffing tailoring our services towards either large or small customers is a key objective for 2011 we will also remain cost disciplined and continue to work on our delivery models in order to remain the cost leader we work towards fewer more standardised it platforms we will invest more in development so that we can further profit from fast evolving new sourcing and delivery models adecco group company report 2010 11

[close]

p. 12

work is a basic need it should be a basic right for all people what are your expectations for the coming year from the professional staffing market which means high growth and provides high margins to adecco in the mature markets the ageing population and the mismatch between educated individuals and labour market needs will continue to drive scarcity of talents that s why our strategy is driven by being alongside each phase of the life cycle of our candidates from the moment they leave school to the moment they retire we have to attract them better than anybody else and we have to keep them longer than anybody else in order to keep our candidates within the adecco space we have to be able to constantly offer them the best jobs with the best clients at the best possible wage statistics show that in the last decade professional staffing in the us grew three times faster than general staffing we expect this trend to continue driven by the race for talent you have a leading position in the emerging markets ­ what is your growth strategy in these markets it is a clear strategic priority for us to take advantage of the immense growth potential in the emerging markets our strategy is to grow both organically and through bolt-on acquisitions our organic revenue growth in india in 2010 for example was close to 60 per cent compared to a group average of 12 per cent and we went from zero to 100,000 associates in just 12 adecco group company report 2010 six years our international clients are investing more in these regions and so are we why did you decide to form a joint venture in china what does each party bring to the jv taking 49 in this joint venture is an important step forward for adecco in china pooling our global staffing know-how with a chinese partner enhances the offering for our multinational client base which is expanding into china at the same time we are excited to broaden our chinese customer base and take advantage of the growth potential within china we have more than 40 years of learned processes to share and at present we place more than 700,000 associates with over 100,000 clients every day at adecco plus a further 100,000 associates through the joint venture in china what is your personal mid and long-term vision for the adecco group the work we do has a direct impact on the lives of hundreds of thousands of people every day the importance of work and what we do to help people find jobs cannot be overstated work is a basic need it should be a basic right for all people and we try to realise this every day in over 60 countries around the world with more than 32,000 fantastic colleagues to foster and enhance the key role we play is clearly my long-term goal

[close]

p. 13

johan lauwers belgium managing director xpe pharma science finding highly-specialised scientists in rapid response to our clients needs is how we have made our name adecco group company report 2010 13

[close]

p. 14

14 adecco group company report 2010

[close]

p. 15

gsk biologicals vaccine development laboratory in wavre-rixensart belgium microbial resistance is on the rise and we urgently need new vaccines to fight pneumococcal disease adecco group company report 2010 15

[close]