European temp work helps Adecco’s results

European temp work helps Adecco's results
Photo: AFP
Swiss-based Adecco, the world's biggest temporary staffing group, on Thursday reported a 15-percent rise in net profit for the second quarter of 2014 over the same period a year earlier, as temp work in southern Europe picked up speed.

For the April-June period, the company said its net profit grew to €145 million ($194 million), in line with analyst expectations.

Adecco's revenues grew just one percent to €4.9 billion during the quarter, but the company stressed that excluding the negative impact of currency fluctuations its revenues actually swelled five percent.

That number nonetheless fell short of the expectations of analysts polled by the AWP financial news agency, who had anticipated revenues of €5.04 billion for the three-month period.

Following the news, the company saw its share price slump 3.52 percent in early afternoon trading to 63.05 francs a piece, as the Swiss stock exchange's main SMI index inched up 0.35 percent.

Company chief executive Patrick De Maeseneire remained upbeat.
"In the second quarter our colleagues delivered another good performance," he said in the earnings statement, hailing steady growth in Europe and a pick-up in North America.
In Europe, sales ballooned 18 percent in Italy and 21 percent on the neighbouring Iberian peninsula (Spain and Portugal, boosted by export-oriented companies.
But in France, the group's largest market, which has long been stagnant, sales remained flat at 1.2 billion euros.
Its vital industrial activities in the country, which account for 85 percent of its revenues there, did grow two percent, but that was offset by a 16-percent plunge in office temp sales.
Sales, meanwhile, swelled three percent in North America, the company's second largest market, and grew 12 percent in emerging markets.
"Based on the current economic outlook and the trends we see within our business, we expect demand for flexible labour to increase further over the course of 2014," Adecco said.
The group said its margins on its earnings before taxes, amortization and restructuring costs stood at 4.6 percent in the second quarter, and confirmed its target of growing that to 5.5 percent by 2015.
Recent positive reports from Adecco's main competitors also testify to an upward trend in the temp world, with US company Manpower and Dutch firm Randstad both seeing sales rise four percent in the second quarter, not counting currency fluctuations.

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