Ladies and gentlemen, welcome to the Q4 Results 2020 Analyst Call and Webcast. I am Moira, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Nicolas de la Renaudie, Head of Investor Relations. Please go ahead, sir. Good morning, welcome to Adecco Group's Q4 2020 results call. With me today are Alain Dehaze, Group CEO, and Coram Williams, Group CFO. As usual, before we begin, please review the disclaimer regarding forward-looking statements on page two. Coming to the agenda on slide three. Alain will begin with the key highlights from Q4. Coram will then review the financial performance and provide some commentary on the outlook. Alain will then give a brief summary of what we announced at our recent Capital Markets Day, and finally offer some concluding messages before we open the lines for your questions. Alain, over to you. Thank you, Nic, and good morning, ladies and gentlemen. Welcome to our fourth quarter results analyst and investor call. Let's begin with an update on how we are navigating the COVID crisis and with the key highlights from the quarter. While market conditions in the fourth quarter remained challenging, we delivered another strong performance. Our primary focus remains on supporting clients, candidates, and our colleagues to safely return to work. In many cases, this means facilitating job creation in sectors that are witnessing growth linked to the crisis. For example, in e-commerce, logistics, and healthcare. I would like to thank our colleagues for the excellent job they are doing finding and capitalizing on those pockets of growth, which often leverage our leading digital capabilities and on-site solutions. Indeed, we are seeing a continued broad-based revenue recovery, and we are outperforming the pace of market recovery in many regions. Despite the continued revenue decline, our profitability remained resilient. Through a combination of agile cost management, discipline on pricing and business mix, as well as our portfolio diversity, we achieved a sector-leading EBITDA margin in the fourth quarter and for the full year. Speaking of portfolio diversity, LHH delivered further double-digit revenue growth in Q4. As a global leader in career transition and redeployment, LHH is well-positioned to continue to support clients and individuals through the workforce transformations that the COVID crisis is accelerating. Something else that I believe we can be proud of is the strength of our financial position throughout the crisis. It allowed us to continue to invest in our digital agenda and to maintain our strategic focus. It also allowed us to uphold our dividend commitment last year and to propose a stable dividend this year. The actions we took pre-crisis to ensure a sound financing structure and liquidity proved invaluable. As economic conditions and our business performance have improved, we now believe it is appropriate to also resume the share buyback that was paused at the onset of the crisis. Coram will provide more details on that. Let's now look at how this has translated into our financial performance. The improvement in the year-on-year revenue trend continued. Revenues declined by 5% in Q4 from -15% in the third quarter. Gross margin was strong, up 50 basis points organically, supported by outperformance in LHH, positive impact of COVID-19 employment support schemes, and pricing discipline. We are consistently outperforming relative to the peer group. We also managed our cost base with agility. EBITDA margin was strong at 4.8%, up 10 basis points organically. Our strong focus on collections resulted in very good cash flow with DSO down three days and cash conversion of 123%. We concluded the GrowTogether program in the fourth quarter with the key initiatives being integrated into the new Future@Work strategy. I am pleased to say that GrowTogether, in the end, delivered EUR 240 million of benefits in 2020, almost reaching the EUR 250 million target set in 2017, despite the volume declines in 2020. We continue to innovate. In France, we recently launched a new long-term contract that combines employment with training, the so-called CDI Apprenant or CDI Learning. Based on data science, we identified the most acute skill shortages in the French market and have developed programs to recruit, employ, and train individuals in these skill sets. Already in Q4, we employed more than 2,000 individuals on these new contracts, well on our way to the target of 15,000 within three years. Lastly, in November, we acquired Hired. The crisis presented us with an opportunity to combine Hired with Vettery to create the largest artificial intelligence-driven recruitment marketplace in the world. I would now like to hand over to Coram to discuss the financial performance in more detail. Thank you, Alain. Good morning, everybody. Let's start by looking at the revenue trends in Q4. Revenues in the fourth quarter were down 5% on a trading days adjusted basis, compared to a decline of 15% in the third quarter. That is an exceptionally strong performance in the circumstances. At the start of the quarter, we were somewhat cautious, given new lockdowns were being imposed. Some clients in manufacturing sectors were indicating that they may shut down for longer than usual over the Christmas period. In the end, the impact of lockdowns was modest, and demand in December was robust. The improvement was broad-based by region, as you can see here. In Europe, the decline reduced to minus 7%, from minus 19% in Q3, showing real resilience despite the reintroduction of lockdown measures. In North America, the improvement was not quite as pronounced but was still significant. Revenues were down 9%, from minus 17% in the previous quarter. The rest of the world outside these two regions returned to growth and was up 2%. While Japan slowed somewhat, this was more than offset by a return to strong growth in Latin America and Eastern Europe. Looking at the country revenue results in more detail on slide nine. In France, our largest market, the revenue decline improved to minus 10%, from minus 18% in Q3. Performance remained resilient despite stringent lockdown measures. It's worth noting that France was a bit of an outlier in Q4, where most markets saw continuous improvement through the quarter. The French market recovery stalled in November and December as lockdown was reimposed. The revenue trend is not quite as strong as elsewhere, which weighs on group performance given the size of our French business. Despite that, our performance in France was ahead of the market. In North America and U.K. general staffing, we returned to growth of 6%, driven by the U.K. North America was down 5%, broadly in line with the market trend, with the decline led by lower demand from clients in the manufacturing and financial service sectors. In the U.K., revenues significantly improved with 32% growth, driven by strong demand from e-commerce clients. In North America and U.K. professional staffing, sales were down 22% in the quarter. The trend in North America improved by around seven percentage points to -14%, with strong improvement in our professional recruitment businesses. U.K. professional declined by 34% as it continues to be impacted by the IR35 regulation and the COVID crisis. In Germany, Austria, and Switzerland, the rate of revenue decline improved to 11%. In Italy and Iberia, we saw a strong rebound and outperformance against the market, led by the manufacturing and logistics industries. Growth was 9% and 6% in Italy and Iberia, respectively. In Japan, revenues were flat, slowing versus the prior quarters. Contract renewals remain high, but lower new orders linked to the COVID uncertainty have impacted growth. In the rest of world, we had some very strong performances in Latin America, up 23%, and Eastern Europe, Middle East, and North Africa up 7%. In career transition and talent development, LHH performed strongly, accelerating to 16% growth from 14% in Q3, driven by the counter-cyclical career transition business, which was up 22% year-on-year. Turning now to the gross margin on slide 10. Overall, gross margin performance was strong, up 30 basis points in reported terms and up 50 basis points organically. The strength and breadth of our portfolio continue to play an important role. Temporary staffing had a positive impact of 70 basis points. Approximately 40 basis points came because we recognized the full year benefit of COVID employment support schemes in North America, U.K. and Ireland general staffing all in the fourth quarter. Across the year, it would be a more modest impact. It's also unusual because COVID supporting gross margin is generally a pure pass-through to associates' wages, whereas in this case it is not. The underlying price mix trend remains positive, supported by disciplined pricing and our continued approach to selectively exit some of our lower margin activities. Permanent placement had a 40 basis points negative impact. As is usual, perm growth is recovering less quickly than temp, which means it continues to drag on gross margin mix because it is a fee business with close to 100% gross margin. Mostly offsetting the decline in perm was career transition, which added 30 basis points, providing a natural hedge to the perm business. Overall, this was a very healthy gross margin development in the quarter. Let's now look at the EBITA margin. The margin was 4.8% in Q4 2020, down 10 basis points on a reported basis or up 10 basis points organically. This continued the trend of improvement since the trough in Q2, and in light of the revenue decline, it is a strong performance. In addition to the robust gross margin trend, we continue to be very disciplined in terms of SG&A and managing FTE productivity as revenues come back. Recall that the gap between the organic and the reported margin relates to the divestment of Soliant Health at the end of Q4 2019. That impact goes away from Q1 2021. Looking more in detail at the profitability by market. In general, we continue to see improvement in the trends across most regions, so I will focus on just a few of the key regions. In France, the EBITA margin was relatively resilient despite the revenue declines due to strong cost management. North America and U.K. general staffing margin was up 200 basis points year-on-year, benefiting from the COVID support impact that I described earlier. Excluding that, the margin would have been down slightly. Germany, Austria, and Switzerland achieved a strong improvement in the EBITA margin, benefiting from the restructuring of the business started in the third quarter, and also higher bench utilization. In North America and U.K. professional staffing, the majority of the decline relates to the Soliant divestment. Finally, in career transition and talent development, the continued improvement is coming from strong operating performance in LHH. On slide 13, we see the SG&A development relative to sales and gross profit. Overall, we continue to manage our SG&A well, with costs down 2% organically year-on-year. Looking at the breakdown of the SG&A movements, FTEs were down 10% and personnel costs by 8% organically. As activity picks up, we're bringing back many of our colleagues who've been on short-time work. With that, the impact of COVID employment support on SG&A has now diminished significantly with a benefit of around EUR 6 million in Q4. On the other hand, the good performance in Q4 meant that bonus and commission accruals were up year-on-year, and particularly versus the third quarter. Within corporate, we also had some additional costs relating to higher IT and digital expenses and the start-up costs linked to the Future@Work strategy. Overall, we achieved an organic recovery ratio of 75% in the quarter. That was significantly flattered by the one-time gross margin benefit that I talked about previously. Excluding that benefit, our recovery ratio was in line with guidance at around 50%. Mathematically, when the gross profit decline is only slightly negative year-on-year, as was the case in Q4, the recovery ratio becomes sensitive to small changes in gross profit and SG&A. Looking at 2020 as a whole, the organic recovery ratio was strong at 47%. That reflects a low recovery ratio in Q1 when the crisis first hit, followed by good performances in the last three quarters of the year. Turning to the cash flow and the balance sheet on slide 14. Cash flow was strong with cash conversion at 123%. Operating cash flow was €159 million compared to €382 million in Q4 2019. The lower operating cash flow was primarily driven by investments in working capital, reflecting higher levels of business activity. DSO was down three days year-on-year. Net debt to EBITDA was at 0.4 times, slightly improved compared to September. The balance sheet remains very robust with EUR 1.5 billion of cash on hand and an undrawn credit facility of EUR 600 million and no material refinancing requirements in the near term. As Alain already mentioned, this strong financial position allows us to propose a stable dividend for 2020 of CHF 2.5 per share. We also announced today that we will resume the EUR 600 million share buyback that was announced with the full year results last year and subsequently paused due to COVID. The worst case outcomes of the crisis have clearly not materialized, and we therefore believe it is appropriate to start the buyback. We will do so cautiously at first, given the high degree of economic uncertainty that prevails linked to COVID, as well as the working capital requirements that a return to growth brings. Coming to the outlook. The revenue trend improved consistently through the fourth quarter, with December down only 2% trading days adjusted. Lockdown measures in early 2021 became considerably more restrictive, approaching the situation of last spring in some countries. These measures have not materially impacted demand to date, although they have led to a pause in the revenue recovery trend. January revenues were in line with December, down 2%. February is looking similar based on the volume trends. As we've said previously, the recovery is likely to be nonlinear and bumpy in nature. On the cost side, we will remain agile to protect profitability while investing in our transformation and areas of growth. For Q1, it's difficult to give meaningful recovery ratio guidance because it is sensitive to small changes in growth, as I explained before. The rule of thumb, however, of a 50% recovery ratio when revenues are declining and a 50% incremental conversion ratio when we first return to growth, is the right way to think about SG&A development. Before handing back to Alain, I'd like to remind you that since January the 1st, 2021, we've been operating under the new group management structure as outlined at the Capital Markets Day. The Q1 2020 results in May will be the first quarter presented under the new structure, and we will be sharing with you comparable historical data ahead of that time to help you rebuild your models. We recognize that this is an investment of time for you all, and we really appreciate your efforts and your understanding. With that, I'll hand back to Alain. Thank you, Coram. Before we conclude, I would like to remind you of the updated strategic direction of the Group. The Future@Work strategy builds on the achievements of the Perform, Transform and Innovate cycle, with some important changes. To help accelerate our transformation and to improve the focus of our businesses, we have shifted from a country-centric to a brand-led organization with three global business units, Adecco, Talent Solutions, and Modis. This new structure will enhance focus, reduce complexity, improve resource allocation, and allow client and candidate strategy to account for differences in end markets. For Adecco, focus is on market share and cost leadership through a digitized omni-channel strategy and superior client and candidate experience. In Talent Solutions, we will drive growth by addressing the end-to-end skills transformation needs of all customers, bringing together the complementary strengths of the various brands. With Modis, we are building a market leader in technology consulting focused on smart industry. Central to the entire strategy is a clear common social purpose to make the future work for everyone. Underpinning the strategies of all three business units is a group-wide focus on customer experience, differentiation, and digitalization, the three key enablers of Future@Work. Customer experience is a continuation of the customer centricity of the prior cycle, with a focus on consistent, high-quality experience through standardization at scale. Differentiation means leveraging the breadth of the Group to deliver 360-degree solutions and elevate our services above that of the competition. Digital and data underpins everything we do. It drives up economies of scale and will reinforce differentiation and customer experience. We firmly believe that Future@Work will create more value for all our stakeholders and a strong financial performance for our shareholders. Revenue growth will improve, supported by a dual growth strategy of market share gains in the Adecco and growing exposure to the higher growth Talent Solutions and Modis. We also commit to lifting the EBITDA margin over time, moving from an historical range of 2.5%-5%, to 3%-6%. We will continue to generate strong cash flow. This provides capacity to invest to grow our market share, as well as provide attractive returns to our shareholders. Coming now to the concluding messages. We continue to successfully navigate the COVID during this fourth quarter. The revenue trend improved, with sales down 5% in the quarter and down 2% in December. We are performing ahead of the market recovery in many markets. We are successfully pivoting towards growth areas whilst also supporting more challenging sectors, helping economies to adapt to the new normal. Meanwhile, our profitability is resilient, thanks to ongoing progress on gross margin and agile cost management. Our strong balance sheet provides capacity to fund both strategic and working capital investments and capital return to shareholders in the form of the dividend and share buyback. Throughout the crisis, we have remained strategically focused. The GrowTogether program was successfully concluded in 2020 and was within touching distance of the original benefits target of EUR 250 million despite lower business activity. With Future@Work, we will further accelerate the transformation and digitalization of the group, and we have to continue to innovate. I am excited by what we are doing in the ventures with Vettery, Hired, and Adia to disrupt the permanent and flexible placement markets. I'm just as excited about how they act as an innovation factory, originating scalable innovations that flow to the core business through our digital products team. Finally, before we open the line for the questions, I would like to give a heartfelt thanks to all employees and associates for their continued hard work and commitment. Also to our clients for their ongoing trust. With this, I can hand over to the operator for the Q&A. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets. Anyone who has a question may press star and one at this time. The first question is from Andy Grobler from Credit Suisse. Please go ahead. Hi. Good morning, everybody. I've got lots, but just a couple, if I may. Logistically, commerce was clearly very strong through Q4 and the second half. Could you give some details on the proportion of revenues from those areas and the growth rates through Q4 and 2020 more broadly? Also your opinion on the sustainability of that demand through 2021 as markets open. Secondly, in terms of cost, you talked about the EUR 240 million from GrowTogether. That would have been partly offset by digital investments. Can you tell us what it was on a net basis? Also how much of that is going to annualize into 2021? Thank you. Very good. Thank you for your questions. I would like to elaborate a little bit, perhaps broader than just the logistics, Andy. I think we have done indeed a very good job of pivoting to where the growth is. It is clear that the growth was, among others, in e-commerce, in logistics, and in healthcare, especially in France. When we look more specifically at transport and logistics, it is about 10% of our group sales. The growth was 40% year-over-year in Q4. We expect, let's say, this state of activity, I think to be sustainable as a volume regarding the future, because you see a shift from consumer behavior moving towards more and more online shopping. Just to give you two figures. If you look today at the e-commerce penetration in Europe, it is about 30%. If you look at the e-commerce penetration in U.K., it is about 45%. You see that there is really a trend towards more e-commerce. We also know from our customers, and especially the global one, that they will continue to expand their geographical presence in the various territories they are in today, also penetrating new geographies. This means, for us, a great growth or a great pocket of growth going forward. Picking up the question on GrowTogether. I think the delivery of the EUR 240 million is a real achievement, actually, given the environment in which we're operating. We've got very close to the original target that was set in 2017, despite significantly lower volumes as a result of the crisis. I think it's clear that the team did a really good job of finding new initiatives and plugging the holes, if you like, that resulted from the lower volumes in the crisis. Not all of that has dropped through to the bottom line. There are a couple of reasons for that. Firstly, and probably the biggest driver, is that the revenues were significantly lower than we anticipated at the start of the cycle when we set the target. Clearly, a lot of that is about the COVID crisis in 2020. We also saw economies turn down prior to that. Secondly, there were some pressures in specific countries that we've been dealing with. Germany, where, as we know, the market has gone through some fairly significant structural shifts, which we and the rest of the industry have had to respond to, and also the U.S., where performance has been challenging. Third, we rightly made some strategic decisions to invest in digital and the ventures which were funded partly by the benefits of Grow Together. Having said all of that, I think it's pretty clear, given that we've delivered a full year margin of 3.6% in an unprecedented year, that some of the benefits have dropped through to the bottom line and will continue to support the bottom line going forward. It's one of the reasons why we believe that as part of the Future@Work strategic cycle, we're able to lift the corridor not just in the trough, but at the peak. Thank you. Can I just, two follow-ups. One, a bit of a silly question, you talked about transport and logistics as 10% of sales. Was that at the end of the period or the beginning of the period, just so we know? Secondly, just on the savings you mentioned some of it fell through to the bottom line. How much of that is kind of in the bag to support profitability in 2021, just as the initiatives annualize? I think the best way to think about the%s that Alain mentioned is that it's through the quarter. That's the way we look at that. In terms of the savings, I'm not going to get into the specifics of what was absorbed in the three dynamics that I described and what flows through to the bottom line, but I think you can see we are significantly above the trough in the previous crisis compared to where we are now. That gives you a sense of obviously some of the benefits that have dropped through. Okay. Thanks very much. Thank you, Andy. The next question is from Sylvia Barker from JPMorgan. Please go ahead. Hello, Sylvia. Good morning. Thanks for taking the questions. Two questions, please. Maybe firstly, just following up on the logistics and just that U.K. generalist growth of 32%, is that a large logistics contract that you've won and you will continue to kind of benefit from this year, or is it something else? Secondly, the 40 basis points of gross profit held from the accruals. Could you just help us understand, do these then unwind over the next few quarters or what is the exact impact? Is that basically EUR 20 million on gross profit and EBITA? Finally, you talked about Hired and combining that with Vettery, but it looks like you've already impaired Hired this quarter. Could you just talk about why you have to impair it and what are the initiatives exactly that you mentioned around AI marketplaces? Thank you. Okay. Thank you for your question, Sylvia. Regarding logistics or regarding the results of the U.K., you are perfectly right. You know the state of our industry in the U.K., and we have made a clear difference thanks to the logistics contracts we have over there, and where we have gained a significant market position. By the way, also thanks to some local competitors who had, in this COVID, difficulty to assure their services. Which also means that when you are a strong, capitalized company, globally present, you have also a competitive advantage, and you see exactly in the U.K. the benefit of it. I'll take the other two questions. On your first one around the 40 basis point benefit, let me just explain where that's come from. That is employment support schemes in North America, U.K., and Ireland general staffing. We recognized the full year benefit of those support schemes all in the last quarter. You have a disproportionate impact in Q4 of 40 basis points. Over the full year, it's around 10 basis points. The reason we've called it out is that this is clearly an exception. We're very transparent around the impact of employment support schemes on our SG&A, and that's about EUR 50 million for the full year. On the cost of goods sold, as I mentioned in the script, the majority of them are simply straight pass-throughs between government and associate, and we're acting as the conduit. In this case, it's slightly different because it's not a full pass-through due to the nature of the scheme, and therefore we've highlighted it. It is a one-off, though, in Q4. Obviously, I don't know what is likely to happen in 2021 around employment support, but if we see something similar, then obviously we would call it out. It is a one-off impact in Q4. Then on your third question, the impairment, the modest impairment that's gone through was relating to software in Vettery. The reason for this, we acquired Hired, and there are really two aspects of Hired that make it attractive. Firstly, it has a strong technology platform, which we are migrating our Vettery business onto, and it has strong customer lists. Therefore, we took that small impairment to reflect the write-down of the Vettery software on our books. Thank you. Sylvia? Thank you. The next question is from Paul Sullivan from Barclays. Please go ahead. Good morning, everyone. Just a few from me. Firstly, you seem to be closing the gap to your peers. How confident are you that you can sustain that momentum as we go through this year? Do you think there's scope for you to grow ahead of your peer group, mix permitting, and particularly in those troubled areas, thinking about the U.S. in particular? Second, usual question about gross margin moving parts in the first quarter. I don't know if you can provide just a little bit more color on SG&A organic guidance for Q1. That would be helpful. Then finally, on the buyback. What would be the trigger for you to accelerate the timing? Is it just going to be organic revenue growth? Should we see that timing as sort of set in stone? Because it does feel quite cautious given your leverage. Should we be braced for a bigger reversal in working capital, just as it surprised on the way up, will it surprise as it outflows as you return to growth? Thank you. Thank you, Paul. I will start on your closing the gap question. I would say that we are pleased by the performance of the fourth quarter. We are pleased for different reasons. First, we have seen that the teams have leveraged sometimes also the data science we have in order to really focus our activities towards market with growth pocket. You have heard, for example, the figures I've given to you regarding e-commerce, logistics, healthcare. We will continue to do this. Yes, we want to lead the pack, not only on the bottom line with the profitability, and you have seen we have again, a leading profitability in the quarter and in the year, but we want also to close the gap. I would say we have done a great job towards many of the peers during the year. We have still a little bit work to do, and we will continue. Be reassured that we want to do that in a structurally profitable way. That's why we are very structured. We keep our pricing discipline. You have seen, again, our gross margin increasing because we want to leverage pricing discipline or mix of activities and really focus on the pocket of growth with also some structural opportunities going forward. We didn't talk about the new economy, but we see that this platform economy is very positive for us because we are the best partner for human resources management. We didn't speak about the gig economy, but we see also midterm, a great opportunity for us to expand in this gig economy. Finally, upskilling and reskilling, in which we have strong assets. There is a really big opportunity for us to upskill and reskill the employees of our customers going forward. Let me pick up your other two questions, Paul. Starting with gross margin. You can see in the bridge for Q4 that the moving parts in gross margin continue to be volatile, which makes it difficult to give firm guidance. I will try and give you just a couple of pointers, which I think will help you work through it. On M&A, as I mentioned in the script, the Soliant impact drops out, that will be a broadly neutral impact. Zero basis points. I think secondly, FX is likely to be similar to Q4, a modest drag of perhaps 10 basis points. I think thirdly, the negative perm impact, as we saw in Q4, was slightly outweighed the positive career transition impact, it's probably reasonable to assume a similar dynamic in Q1. Fourth, I would expect temp to continue to be positive based on the pricing discipline that both Alain and I have referred to, but not as much as in Q4 because you have to remember that North American, U.K., and Ireland employment support impact. Hopefully, that gives you a sense of what the moving parts might be. On SG&A, I think the most helpful way to continue to think about it is the rule of thumb by which we've been managing the business. A 50% recovery ratio when the business is declining and a 50% incremental conversion ratio when we're back to growth. In Q1, it's likely to be around flat in terms of growth, which makes the recovery ratio quite sensitive to small changes, and therefore, I can't give you a precise guide on it. I think if you use those rules of thumb in terms of the recovery ratio, 50% in the down and the conversion ratio of 50% in the up, that should work well. In terms of the SG&A growth year-on-year, as activity comes back, productivity will clearly drive some of the incremental conversion ratio, in the early phase of the recovery. Headcount will also need to increase. Remember that the impact of government support schemes will only be EUR 2 million in Q1. I should clarify, I'm not giving guidance for the Q1 revenues, but I'm just highlighting that it's likely to be around that area. Finally, on the buyback, I think it's really important that we recognize that we have a capital allocation policy that we reiterated at the Capital Markets Day, where we return cash to shareholders where appropriate. We've got a strong balance sheet, net debt to EBITDA of 0.4 x, significant cash reserves. We think it is appropriate for us to return or resume the buyback, which is ultimately about returning the proceeds from the disposal of Soliant. In the current environment, we do have to balance the needs of all of our stakeholders. There continues to be some uncertainty in terms of the economic environment. As you mentioned, we would expect there to be a working capital requirement as we come back to growth, not disproportionate, but just the normal kind of working capital that we require to fund the growth. On that basis, we are being cautious and starting slowly. I think if the situation changed, either better or worse in terms of the outlook or the working capital requirements, then clearly we would review our approach. At the moment, we think it's right to start in a cautious way. That is very clear. Thanks for that very comprehensive answer. Thank you. Thank you, Paul. The next question is from Anvesh Agrawal of Morgan Stanley. Please go ahead. Yeah. Hi. A couple of questions and just one clarification. First, you talked about e-commerce and the tailwinds. Going forward, if you think about, is that something that will just sort of offset the pressure that you're likely to see in the traditional retail business? That is something that you see as an add-on to your growth going forward? If more e-commerce means there is obviously pressure in the traditional sectors. In the statement, you have sort of reversed the provision that you had taken in Germany of EUR 23 million. Should we assume that you're kind of pretty close to fixing the issues in German business and the cost-saving plan or the transformation plan is sort of running better than what you originally thought? Just to clarify what you just said, Coram, when you said the growth is likely to be flat, do you mean that on the gross profit or at the revenue level? Good. Starting with your question regarding e-commerce. I think there are two structural trends with e-commerce, which are positive for us. First of all is the market penetration of the solution. And I've given two figures, Europe 30% market penetration, U.K. 45%. It means just at the constant scope, there is at least 50% growth potential in Europe, outside U.K. That's the first perspective. We expect this growth to continue. We see our customers expanding geographically in the different countries. They are continuing to open a distribution center. We see also new solution coming in, new platform solution coming in. Each time, these solutions are outsourcing their human resource management to companies like ours. This is very positive. Second, it is clear that if we look at our market share in this e-commerce solution versus our market share in traditional retail, we have a much higher penetration rate in e-commerce solution than we have in traditional retail. This is also, let's say, a double structural impact we anticipate going forward. Let me pick up on Germany and also my comment on the gross margin. In terms of Germany, in Q4, we saw some good signs of progress in terms of the turnaround of that business. The rate of revenue decline improved to 10%, which we believe is ahead of the market. That was partially because we captured some growth in logistics, but also, as I mentioned in my script, the manufacturing shutdowns, which we thought might come in December, were shorter than we'd anticipated. The gross margin trend was also positive, and that's partly about higher bench utilization, but also the way in which we're managing pricing and profitability of our largest clients. SG&A was down 10% organically linked to the restructuring actions. I think you can see in terms of better than market performance, good gross margin progression, and starting to see the benefits of the restructuring in the SG&A, that there has been progress made in Germany. On the restructuring itself, the reason those costs came in slightly lower than we'd anticipated in Q3 was simply because we've made better progress at a lower cost than we expected on those one-offs. That's partly greater use of natural turnover, but also achieving similar benefits at lower cost on some of our other restructuring actions. I think we're pleased with progress, but let's be clear, there is still more to do. It is early stages of the recovery in Germany, but positive initial signs. In terms of my comments on gross margin, I want to be absolutely clear, I'm not giving a guide on either gross margin or revenue. The point I'm making is that when the revenue line is close to flat, it distorts the recovery ratio. Therefore, for me to give you a firm percentage on recovery ratio is difficult in Q1, because as you can see, in January, we're at - 2, and in February, we're at - 2. I want to highlight the distortions that come as a result of the calculation. That's all. Okay. Just to be clear on that, when you say for this, not just Q1, but overall 50% conversion ratio, within that, you are baking in all the planned savings and the cost movements that you have in 2021? Yes. The rule of thumb, as I've said, is 50% in the down. That's what we recover. In the early stages of the recovery, the conversion ratio of the incremental gross profit is around 50%. That's the way we're managing the business. I think you can see, we delivered a 47% recovery ratio in the full year, and that includes Q1 when this crisis struck right at the end, and therefore it was difficult for us to respond quickly. I think you can take some confidence that the way that we managed in the down is the way that we will manage in the up. Okay. No, that's very clear. Thank you so much. Thank you, Anvesh. The next question is from Alain Oberhuber from Stifel. Please go ahead. Much. Good morning, Alain, Coram, and Nic. Alain Oberhuber, Stifel. I have three questions. The first is regarding permanent placement. I would like to get a little bit sensitivity how you see it at the moment with the different structures. You are more in the e-commerce. If we see a gradual improvement now of the economy, when do you think could we see again the perm being positive? That be clearly by the end of the year or already Q3? The second question is regarding your Future@Work. Could you give us a little bit more color regarding the divestments you have announced in Denmark, Slovakia, and Croatia? Are there more to come at the moment? What are the KPIs you have for the portfolio? Which of the businesses will leave the portfolio regarding KPIs? The third question is, just to come back to the DSO, what could we expect given recent recovery in the business? Obviously, you mentioned that you expect working capital to go up. Would be a fair assumption for the DSO year-over-year to be up again by three days versus Q4, i.e., flat year-over-year? Thank you. Okay, good. As you know, you have been many years in this industry, Alain, like me, perm tend to be always to lag by 6-9 months the recovery in the temporary staffing. When you look at our performance this quarter, you see that we have absolutely not started the recovery in the perm. You need two things to start the recovery. First, you need visibility and trust of the employer, visibility regarding the order book, the level of activity going on, and trust in the future. At this stage, there is such a level of uncertainty in the various markets that companies are not yet at the point of starting to hire again. This is on the side of the employer. On the side of the candidate, as long as there is no clarity, and if you have a job, especially if you have a good job and you are in secure environment, you don't want to jump into uncertainty. It's also very difficult to move candidates from companies to the others. I would say that, yeah, this situation is here to stay a certain period of time. As soon as the staffing recovery will be there, yeah, we anticipate 6-9 months later to see also the perm starting to recover, too. Let me pick up on your second and your third question. In terms of the majority exits from Denmark, Slovakia and Croatia, this is, as you rightly highlight, part of our Future@Work strategy. It is about making sure that we are focused in the markets and the businesses where we believe we can deploy the best returns on our capital. In terms of the KPIs that we look at, obviously profitability is a key piece, but also the return on invested capital. I should highlight, these are small businesses, though. In 2019, i.e., pre-crisis, the combined sales was slightly less than EUR 100 million, and they just about broke even. This is not a material change to our financials, but it's about making sure that we're really focusing where we need to in order to make the most of the structural growth opportunities that we see in our businesses. In terms of DSO, I think we're very pleased, as you would expect, with our performance, not just in Q4, but through the year. On a full year basis, we are stronger than 2019, which I think given the environment in which we're operating, is a real achievement. We will continue to be disciplined and focused on cash collection. For obvious reasons, I'm not going to put a number or give guidance on it, but I think you can be assured that we will continue to remain disciplined around DSO. Thank you, Mark. Thank you, Alain. The next question is from Matthew Lloyd from HSBC. Please go ahead. Good morning, gentlemen. You're very popular this morning. I pressed miss dial one before the conference started, and I'm this low in the queue, so you must be. Thank you, Matthew. We promise we're not deprioritizing you, Matthew. We're taking you in order. I'm sure that's true, although I should probably sulk anyway. Silliness aside, a couple of questions. Everyone's sort of obviously trying to focus on the 50% recovery ratio this year. How should we think about that if this year recovers and next year? I suppose where I'm going is what's the journey for the sort of between 3%-6%? Is 6% attainable or 5% attainable in 2022, 2023 with a decent following wind? Is that something we should think about as the last year of a cycle in some sort of mythical future? Let me take that. I think we're giving you a sense of how we manage the business in the current environment. In other words, when it is declining, you have a recovery ratio of 50%, and obviously in the early stages of a recovery, we have a conversion ratio of 50%, although at the end of the day, we do have to put cost back in to match the activity. I think longer term, in terms of the margin target and the upper end of the range, in the short term, which is why we give you the rules of thumb, it is about positioning ourselves effectively for the recovery while maintaining margin leadership. Longer term, we get to the upper end of the range, obviously partly through the cyclical recovery that we are anticipating. Also by driving the digitization of Adecco, which in turn helps us gain share and investing in the structural growth opportunities in Talent Solutions and Modis. In the midterm, we're clear we can get to the top end of that range. I think you'll understand, given the uncertainty of the economic environment, that I won't put a timeframe on that. Okay. As expected. A couple of just more sort of your opinion kind of questions, really. A number of your competitors are talking about there being less competition from smaller players. I know in the U.K., Companies House suggests that 6% of temp firms have gone bust. Now, that might be in part IR35, but other firms are saying perhaps there's some bigger players are doing better. I wondered whether you felt that was true across other markets. Then secondly, there's a number of surveys out suggesting that people are prepared to hire staff from a much wider catchment area, given the probability of work from home being at least more acceptable. Have you seen any trend in that? Probably in Modis, I would imagine, is where you'd see it, if at all. Yeah. Coming to your first questions regarding small player, market share and so on. Again, you have seen our performance, and that whole performance was quite good, ahead of the market in many countries, France, Italy, Spain, U.K. It relates to two things. First of all, having the knowledge, and it is also about data, to really identify very fast the pockets of growth. It means technology, investment in technology that makes a difference. Second, to focus on sectors and customers who will be, let's say, the winner, or which will come stronger after the crisis. Combining these two, technology and focus on these customers, we are convinced that thanks to our investment in tech, thanks to our digital solution, we have the ability to sustainably grow our market share. Now, on the point regarding work from home. Again, if my memory serves me well, we had in Q2, 30,000 internal people working from home, and we had 40,000 associates, partly from Modis and from some other brands, but largely from Modis, working in a remote way. There is a trend. Now, I think it's a little bit too early to really understand the impact at this stage. Yeah, intuitively, there is a logic to it. I think we will continue to see that. For sure, all investment we have done and will do, will allow us to really work, all people and all associates, to work from everywhere. I think that is very important going forward, to be able to work from everywhere. We're going a little bit over, so we'll just take one more question, please, from the lines. Thank you. You are welcome. Thank you. The next question is from Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi. Good morning. Just one from me, please. You gave very interesting color on the growth potential that you see in areas like e-commerce, logistics, healthcare, et cetera. Can you maybe comment on whether you're considering further exits from areas that have less growth potential medium term, just to improve the revenue trends versus some of your peers, and maybe similar to what you have done in 2019, for example. Can you maybe comment on that? Thank you. You have seen that we are managing in a dynamic and strategic way our portfolio. When we speak about portfolio, it takes different dimension. You have the geographic dimension, and you have heard what Coram has said regarding some of the geographies, which for us was not really, let's say, strategic, and we could find a solution to serve our international customers without the obligation to be ourselves present. We will continue to analyze where it makes sense for us to be directly present or to have partners with which we can work. That's on the geographic aspect. Again, industries. Again, you have seen we have pivoted towards the sectors with growth pocket. Thanks also to the data science, we will continue to really identify, focus the industries and the customers where we need to be active to really make sure we leverage the growth potential. Eventually, also have less efforts, activities in some others. The good things is that the sectors which are really structurally under pressure because of the COVID and because of the tech acceleration, we are not really exposed. When you take hotel industry, hospitality, this is a very, very limited activity of us. Then the third is the type of services. You have seen the move we have done with upskilling and reskilling. This is an example of service extension, which demonstrates, let's say, of strategic insight, because we think it is important going forward strategically to offer that kind of service of our customers. We are looking at our portfolio in these three dimension, in a dynamic and strategic way, and we take the conclusion with, or an action we think we need to do. Thank you. Thank you for your question. Yes. I'm looking at the time, and I think it is now the right moment to close this call. I would like to give you just a short closing statement. First of all, to thank everyone for having joined this call and for your questions. You have seen that we have delivered an exceptionally strong performance in 2020, despite the unprecedented circumstances. You have seen that we have successfully, and we are successfully leveraging growth opportunities where they exist, supporting individuals back to work and our clients to adapt to the still rapidly changing environment. Meanwhile, the strength and balance of our portfolio, as well as our price discipline and agile cost management, has allowed us to deliver a resilient margin in the Q4 and for the full year 2020. Indeed, last year has proven the strength of our business model, and that we are able to deliver resilient earnings and cash flow performance even in a challenging market environment. That allowed us to maintain our dividend commitment last year, but again in 2021. It also supports the resumption of the share buyback. Now, looking ahead, we are prepared for the recovery to be bumpy, but we will continue to manage the short term with agility while maintaining our strategic focus, continuing to invest in our strategic priorities to ensure that the group emerge stronger from the crisis. Talk to you soon, and thank you. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.