* Q3 net profit 191 mln euros vs 137 mln in poll
* Revenue excluding currency swings flat at 5.033 bln euros
* Says on target for EBITA margin of over 5.5 pct by 2015
* Shares hit six-year high
By Caroline Copley
ZURICH, Nov 6 Adecco, the world's No.
1 staffing agency, posted a 61 percent jump in net profit in the
third quarter and flagged rising demand for temporary workers as
companies look for flexibility to weather a volatile European
The staffing sector is generally seen as a barometer of
economic health because companies tend to hire temporary workers
at the beginning of a recovery when most businesses are
reluctant to commit to full-time hiring.
Chief Executive Patrick De Maeseneire told Reuters that
uncertainty about the underlying health of the continental
economy would keep demand for temps buoyant.
"With two crises behind us, companies will be hesitant to
hire fixed workers. There are going to be bumps along the road
and there is also no scarcity, so why would companies hire fixed
and pay more in terms of charges and benefits?"
On Tuesday, the European commission trimmed its expectations
of growth for the euro zone next year, with weaker private
demand and investment expected to hold back momentum.
Adecco has cut costs during the crisis. Net profit was 191
million euros in the third quarter compared to 118 million a
year earlier, beating the average analyst poll forecast of 137
Excluding currency effects, revenue was stable at 5.033
billion euros, marking an end to five quarters of declines in
constant currency terms. The Swiss company returned to growth in
October and expects to post strong single-digit growth for the
full year 2014.
Shares in Adecco had jumped 5.7 percent to 69.80 Swiss
francs by 0830 GMT, touching a six-year high.
"As European countries exit recession we expect to see
further growth into 4Q13 and next year with a favourable impact
on profitability," said Vontobel analyst Michael Voeth, who has
a 'buy' rating on the stock.
EARLY CYCLE DEMAND
Adecco, which makes around 60 percent of its revenue in
Europe, said demand was being driven by industrial staffing. It
noted a strong pick-up in demand in Spain and Italy - countries
which have only recently started to emerge from recession.
De Maeseneire said manufacturing had returned to growth in
Germany, with demand in the automotive and aerospace sectors
In France, the company's biggest market, revenue fell 5
percent, although the rate of decline was slower than in the
second quarter. French power and engineering firm Alstom
said on Wednesday it planned to cut 1,300 jobs
De Maeseneire blamed a slowness to implement labour market
reforms for France's underperformance, but said he expected the
country to return to revenue growth in the course of the first
half of next year.
North America grew 3 percent, driven by industrial staffing.
One weak spot remains, however - the financial services sector,
and the company is not expecting this to change in the near
Adecco confirmed its target for earnings before income tax
and amortisation (EBITA) margin to represent more than 5.5
percent of revenue by 2015.