* Third quarter net profit 118 mln euros, vs 109 mln
forecast in poll
* Revenues 5.279 bln vs average forecast of 5.259 bln
* No improvement in Europe until H2 2013 at the earliest
* Shares rise 3 pct, outperform sector
By Caroline Copley
ZURICH, Nov 6 Adecco, the world's
biggest staffing group, expects no improvement in Europe's job
markets until late next year because businesses are reluctant to
hire due to uncertainty about the euro zone debt crisis.
"It is going to be very slow in Europe into the beginning of
next year and if something improves it is going to be in the
second half but not before that," Chief Executive Patrick De
Maeseneire told Reuters.
Adecco, which reported solid third quarter results on
Tuesday, said revenue declines in the hardest-hit regions of
Italy and Spain seemed to be stabilising, suggesting employers
had already cut to the bone.
"The fact that revenues are not dropping off like they were
in 2009 means that there are a lot of companies that are really
stretched to the minimum," De Maeseneire said.
Unemployment in the euro zone rose to a record high in
September, while a survey of manufacturing activity for the
region - which acts as an indicator for economic growth - shrank
for the 15th month in a row. [ID :nL5E8M2421]
Adecco's third-quarter revenues fell 5 percent organically
to 5.279 billion euros ($6.75 billion), compared to a 4 percent
fall in the second quarter. The company said it saw a further
slowdown in sales at the start of the fourth quarter.
In Europe, Adecco's revenues fell an average of 8 percent in
the quarter, the same decline as in the second quarter.
But the company painted a brighter picture for North
America, where the pace of sales growth accelerated in the
quarter to 3 percent organically, driven by the information
technology sector. Adecco also said there were good indications
that industrial manufacturing was holding up.
Since the financial crisis, companies have relied more on
temporary staff to increase flexibility. The number of temps is
considered a gauge of broader job market activity because
employers add or cut them before hiring and firing permanent
Adecco, which competes with Dutch group Randstad
and U.S. rival Manpower Inc, has managed to weather the
difficult economic climate by keeping tight control of costs.
The company's quarterly net profit fell 18 percent to 118
million euros, but this was ahead expectations for 109 million
euros in a Reuters poll .
It achieved an earnings before interest, tax and
appreciation (EBITA) margin of 4.4 percent in the third quarter,
up from 3.7 percent in the second, which reflected its cost
discipline. The company was still convinced it could reach a
mid-term target for a core profit margin of more than 5.5
"The operating results emphasise once more the on-going cost
control and pricing discipline," said Sarasin analyst Patrick
Hasenboehler. "Today's result should support the share price, as
it shows Adecco has its business under control."
By 0917 GMT, Adecco shares were up 2.9 percent at 46.47
francs, outperforming to a flat European industrial goods and
CEO De Maeseneire urged European politicians to implement
labour market reform to reverse the industrial decline which has
led to thousands of job losses.
Peugeot, a key Adecco client, plans to cut 8,000
jobs in France and close an assembly plant, while Ford Motor Co
is scrapping some European plants affecting thousands of
"Either we attract manufacturing and give a boost to all the
industries that really recruit low-skilled people or we are
going to have these high unemployment numbers for a long time,
particularly in the southern parts of Europe," he said.