Adecco profit dips amid French job market woes

The world's biggest temporary staffing group, Swiss-based Adecco, on Wednesday posted a 27-percent drop in its 2012 net profit to 377 million euros ($492 million) from the previous year owing to plummeting activities in its main market, France.

Adecco profit dips amid French job market woes

In the fourth quarter of the year, Adecco's net profit plunged to 35 million euros from 133 million euros in the same period a year earlier, well below an analyst forecast compiled by Dow Jones Newswires of 86 million euros.

Adecco shares slid by 4.20 percent to 52.40 francs (42.50 euros, $55.34) in early trading on a Swiss stock exchange that was down by just 0.36 percent overall.

For all of 2012, Adecco sales were three percent lower at constant currency rates, at 20.5 billion euros, while core operating profit fell by 11 percent to 725 million euros.

"Most of Europe was challenging and we faced double-digit revenue declines in France, Italy and Iberia," said company chief executive Patrick De Maeseneire in a statement.

He said later in a conference call that the weak performance in France stemmed from problems in the auto and industrial manufacturing sectors.

In the fourth quarter of 2012, the Zurich-based company, which is restructuring its French activities, said that sales there fell by 17 percent to 1.2 billion euros.

Britain and Ireland were bright spots in Europe last year, with annual sales rising by six percent, while Adecco gained market share and saw sales rise by one percent in Germany and Austria, De Maeseneire said.

Outside of Europe, Adecco posted a solid performance in North America, where sales grew by eight percent in the final quarter of 2012, and in emerging markets where it posted double-digit growth.

For 2012, the company's board plans to propose a stable dividend of 1.80 francs per share.

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Top execs quit Adecco amid improved results

Swiss-based Adecco, the world's biggest temporary staffing group, said on Thursday that both its chief executive and finance chief have quit, as it posted strong first-quarter earnings on the back of improving sales in Europe.

Top execs quit Adecco amid improved results
Photo: AFP

In a surprise announcement, Adecco said its CEO Patrick De Maeseneire would be leaving at the end of August and would be replaced by Alain Dehaze, a Belgian national who currently leads the company's operations in its key
market France.
The Zurich-based company also announced that its chief financial officer Dominik de Daniel had decided to leave at the end of July, and that his successor was yet to be determined.
Adecco's board thanked both men for their "outstanding contribution" to the company, but gave no explanations for their departures.
"The fact that the board decided for an internal successor stands for continuity," chairman of the board Rolf Doerig said in a statement of the decision to hand the reins to Dehaze, who joined Adecco in 2009.
Thursday's shake-up announcement cast a shadow over Adecco's stellar earnings, which showed a 45-percent jump in net profit in the first quarter to €160 million ($182 million).

That was better than the expectations of analysts polled by the AWP financial news agency, who had anticipated a net profit of €145 million for the quarter.

Adecco's revenues meanwhile grew nine percent to 5.0 billion euros as the economic outlook improved in Europe.
"In the first quarter revenue growth accelerated, helped by an improving environment in Europe," De Maeseneire said in the earnings statement.
"Conditions in France stabilized and we saw a pick-up in Benelux, while Italy, Iberia and Eastern Europe again achieved double-digit growth," he said.
France meanwhile lost its place as Adecco's largest market, with North America taking the lead for the quarter with 21 percent of total sales.
In France, which accounted for a fifth of Adecco's total sales, revenues slipped two percent during the quarter to €1.0 billion, hit by a weak construction sector.

Looking forward, the group said that based on the current economic outlook, it expects "revenue growth to accelerate in the second half of 2015".