Thriving Amid Unpredictability: A Showcase of Resilience in a Volatile Scenario
In the third quarter of 2020, LHH, a leading global provider of workforce solutions, reported a robust performance despite the challenging market conditions. The company's EBITA margin, excluding one-off expenses, stood at 4.5%, marking a significant improvement compared to the previous year. However, the EBITA margin was impacted by one-off expenses of EUR 89 million in Q3 2020, which were higher than the EUR 16 million recorded in the same quarter of the previous year.
Revenues decreased by 15% year-on-year, with organic growth and trading days adjusted for Q3 2020. Despite this decline, LHH's gross margin increased by 20 basis points year-on-year to 19.6%.
The company's strategic approach for improving revenue and maintaining profitability during uncertain times centres on a comprehensive transformation plan. This plan focuses on operational restructuring, cost reduction, and efficiency enhancement, aiming to achieve Adjusted EBITDA-positive operations by Q2 2025 and projecting sustained cash flow positivity starting Q3 2025.
Key elements of this strategic approach include operational restructuring aimed at creating a leaner organization, optimization of global operations to improve efficiency, pursuit of growth opportunities through international rollout of upgraded core products such as diabetes care and HIV testing, and advancement of innovative next-generation products like a continuous glucose monitoring system, which is expected to drive future growth.
LHH's role as an essential service provider places it in a unique position to support economies and individuals in getting back to work. The company's outsourcing, consulting, and up/re-skilling businesses proved more resilient than traditional staffing and recruitment during the crisis.
Meanwhile, LHH's career transition service, LHH, delivered double-digit growth in Q3 2020. The company continued to invest in its strategic priorities during the crisis, demonstrating its commitment to long-term growth.
Net debt/EBITDA, excluding one-offs, was at 0.5x in Q3 2020, indicating a strong cash flow and balance sheet, with a cash conversion of 153%. Alain Dehaze, Group Chief Executive Officer, leads the company's strategic efforts.
No specific reference to Q3 2020 was found in the search results, but the trajectory and core strategic elements described for Q2–Q3 2025 suggest a consistent focus on transforming operations, cost efficiency, and product innovation as levers for sustaining profitability during challenging times.
In the context of LHH's strategic approach, there's a focus on career transition, as the company's career transition service, LHH, delivered double-digit growth in Q3 2020. Additionally, the company is exploring growth opportunities through outsourcing, consulting, and up/re-skilling businesses, which are projected to drive future success, especially in challenging times.
