Adecco profits plunge over ‘challenging’ France

First quarter net profits for Swiss-based Adecco, the world's biggest temporary staffing group, dropped 40 percent to 67 million euros ($87.6 million) from a year earlier, due to restructuring costs and plummeting activities in its main market, France.

Adecco profits plunge over 'challenging' France

The result, released on Tuesday, dipped below the expectations of analysts polled by Swiss financial news agency AWP, who had foreseen a net profit for the three-month period of 73 million euros.
During the first three months, the Zurich-based company also saw its earnings before taxes 
and restructuring costs fall 29 percent from the year-ago period to 138 million euros, while its sales slipped 10 percent to 4.6 billion euros.
Adjusted for trading days, sales were meanwhile down just five percent, 
Adecco said, pointing out that the first quarter had counted more holidays this year than last.
The company, which is in the midst of a far-reaching cost-cutting 
programme, meanwhile, saw its restructuring costs amount to 11 million euros during the quarter.
A full six 
million euros of that was attributed to its restructuring of activities in France, it main market, which continued during the quarter to weigh on its overall results, with sales in the country down a full 17 percent.

Company chief executive Patrick De Maeseneire meanwhile maintained the Adecco's performance was respectable and hinted that the crisis could be winding down.

"Considering the economic headwinds in Europe, we achieved a solid first quarter," he said in the earnings statement, adding that "revenues are starting to bottom out in Europe with the gap to the market narrowing in France."
The company stressed though that "conditions remained challenging" in 
In the rest of Europe, however, Adecco said sales were stabilizing and even 
improving slightly, the company said.
And North America, which constitutes Adecco's second-biggest market, 
bounced back with sales rising two percent during the first three months of the year, it said.
The group reiterated that it expects the economic conditions to improve 
somewhat by the end of the year, and confirmed its target of achieving an EBITA margin of above 5.5 percent by 2015.
Following the news, Adecco's shares opened lower, but as analysts hailed 
the company's outlook, the share price climbed 1.68 percent to 51.55 francs in mid-morning trading while the main Swiss index rose 0.42 percent.

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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".