* Q2 net profit 113 mln euros, vs poll 100 mln euros
* Temporary employment a leading indicator for job markets
* France, Germany downturn more entrenched - PMI data
(Adds CEO and analyst comments, share price)
By Andrew Thompson
ZURICH, Aug 9 Job markets in the euro zone are
unlikely to emerge from a paralysing debt crisis anytime soon,
Adecco, the world's largest temporary staffing group,
said, as it reported big falls in revenues from markets like
France, Spain and Italy.
Adecco, which like other temporary staffing companies acts
as a bellwether for wider labour markets, reported
better-than-expected second-quarter profits, but revenues missed
forecasts and shrank in July, weighing on its ability to keep
eking profits out of core European markets.
"We shouldn't expect anything positive for the eurozone
overall before next year," Chief Executive Patrick de Maeseneire
told Reuters in an interview on Thursday.
Revenues slowed in Japan as well as Europe in July, the
Switzerland-based company said, adding it would continue to
focus on strict price discipline and cost control.
Adecco shares were trading 2.3 percent lower at 43.80 Swiss
francs by 1024 GMT, as economic factors overshadowed results
that were solid overall, and should get support in the
medium-term from the group's ongoing 400 million euro share
buyback programme, analysts at Bank Notenstein said.
Many employers have been reluctant to commit to full-time
hiring, preferring temporary workers as a way of staying
flexible in case the recovery falters. Nevertheless, the
temporary staffing sector is not immune to a full-scale
Adecco generates roughly 60 percent of its sales in Europe
and has strong exposure to markets in Southern Europe where
governments are imposing searing budget cuts and battling record
Adecco, which competes with Dutch group Randstad
and U.S. company Manpower, said second-quarter net
profit fell 20 percent to 113 million euros ($140 million),
weighed by integration and restructuring charges and a higher
tax rate, but 13 percent ahead of forecasts.
The company also confirmed its medium-term target of a 5.5
percent margin on earnings before interest, tax and amortisation
(EBITA). In the second quarter, it only achieved a margin of 3.7
percent, implying it believes it can boost profitability by
PROFITABILITY REMAINS KEY
De Maeseneire said the company would rather give up market
share than compromise on profitability and would therefore not
engage in unreasonable price wars.
"If you look at our profitability, also in France with a 13
percent decline in sales, our EBITA-margin is only down 30 basis
points year-on-year," he said.
Europe's biggest economies endured another turbulent month
in July as businesses battled slumping demand. Purchasing
managers indexes (PMIs), which gauge business activity and have
a good record of tracking economic growth, showed order books at
euro zone companies shrivelled last month as a downturn in
Germany and France became more entrenched.
Adecco, which is providing staff for the London Olympics,
said total revenues fell 4 percent to 5.20 billion euros, with
France, Spain, Portugal and Italy posting double-digit falls.
Even Germany, so far Europe's growth driver, slipped 1
North America bucked the trend with a 2 percent rise, driven
by professional staffing, while Japan fell 10 percent as the
strong demand for temporary employment in the wake of last
year's tsunami and the Fukushima disaster came to an end.
($1 = 0.8093 euro)
(Editing by Dan Lalor and Helen Massy-Beresford)