European temp work helps Adecco’s results

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.

European temp work helps Adecco's results
Photo: AFP

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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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".