Adecco earnings fall short of expectations

Adecco earnings fall short of expectations
Photo: AFP
Swiss-based Adecco, the world's biggest temporary staffing agency, on Thursday reported a rise in third-quarter profits, which missed expectations as business took a hit in its main market, France, and slowed in Germany.

The group, headquartered in Glattbrugg, near Zurich, said its net profit had risen four percent in the July-September period to 198 million euros ($248 million), on sales up three percent at 5.1 billion euros.
That was slightly lower than the expectations of analysts polled by financial news agency AWP, who had anticipated a net profit of 200 million euros on sales of 5.2 billion euros.
Following the news, Adecco saw its share price fall 2.02 percent to 63.20 francs in mid-morning trading, as the Swiss stock exchange's main SMI index eased just 0.22 percent.
"Revenue growth slowed compared to the first half, mainly driven by weaker growth in France and Germany," company chief Patrick de Maeseneire said.
After two quarters in the black, Adecco's main market, France, once again was hit by sliding sales, with revenues there falling three percent to 1.2 billion euros.
Growth also slowed in several other European markets, with Germany and Austria seeing just a one-percent rise in revenues from the same quarter last year.
In the industrial sector, which accounts for about 70 percent of the revenues in those two countries, Adecco said income grew only two percent, compared to 11 percent in the second quarter, amid "weaker demand from clients in the automotive and equipment manufacturing sectors."
Sales, meanwhile, swelled elsewhere on the continent, with the Nordic countries and Adecco's home market Switzerland seeing revenues swell by six percent.
The United States, the company's second largest market, also saw sale grow five percent from the same quarter in 2013.
Despite its overall slower growth, Adecco still aims for its earnings before interest, taxes, depreciation and amortization (EBITDA) to make up more than 5.5 percent of its total revenue next year, de Maeseneire said.
He said he "remain convinced we will achieve our target," since the global economy was expected to pick up next year "despite the recent softening of the economic environment."
The temporary employment sector is considered a good indicator of economic activity as a whole, since companies adjust their temporary staffing in accordance with economic growth expectations.

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