* CEO says Italy, Spain, Portugal starting to improve
* Q1 net profit 67 mln euros vs 80.1 mln forecast in poll
* EBITA margin narrows to 3.0 pct from 3.8 pct year ago
* Says on target for EBITA margin of 5.5 pct by 2015
(Adds CEO comments, details on countries, background, shares)
By Caroline Copley
ZURICH, May 7 Adecco, the world's
largest staffing company, said there were signs
austerity-ravaged markets in southern Europe were starting to
stabilise as big drops in wages make workers there more
The euro zone's debt crisis has paralysed job markets,
sending unemployment in the single-currency bloc to a new record
of 12.1 percent in March, meaning more than 19 million euro zone
citizens are out of work.
Recent economic data offer little hope for a quick recovery.
However staffing firms - which act as a bellwether for wider
labour markets because companies typically hire temporary
workers at the start of a recovery and let them go when a
downturn looms - are offering a ray of hope.
"What we're seeing in countries like Italy, Spain, Portugal,
is that activity is increasing somewhat, but from very low
levels," Adecco Chief Executive Patrick De Maeseneire told
Reuters in an interview.
"There's been enormous salary cuts in those countries, and
they are now becoming more competitive. Slowly, modestly we see
some investments coming back from these very low levels."
That echoed comments from Dutch peer Randstad,
which said it had noted the first signs of recovery in Spain and
Portugal in recent weeks, and an improvement in other European
Adecco said it expected more favourable economic conditions
towards the end of the year.
Revenues at the Switzerland-based firm fell 7 percent,
excluding acquisitions and currency fluctuations, in the first
quarter to 4.6 billion euros ($6 billion), just short of the
mean forecast of 4.7 billion in a Reuters poll..
That marked the fifth consecutive quarter of contraction.
Adjusted for trading days, revenues were down 5 percent.
However, Adecco said revenues started to stabilise towards
the end of the first quarter, falling an underlying 4 percent in
March with a similar trend observed in April.
In Adecco's biggest market, France, where revenues fell 17
percent, the group said it was starting to close recent
underperformance to the rest of the market, although conditions
Adecco, which also competes with U.S.-based ManpowerGroup
, said first-quarter net profit fell to 67 million euros,
undershooting the average poll forecast of 80.1 million euros.
It reiterated a target for an earnings before income tax and
amortisation (EBITA) margin of 5.5 percent by 2015. In the first
quarter, the EBITA margin fell 80 basis points to 3.0 percent.
Adecco shares, which trade at 13.7 times forecast earnings
for the next 12 months, similar to Randstad's 13.8, were up 0.1
percent at 50.75 Swiss francs in early trade.
($1 = 0.7659 euros)
(Editing by David Cowell and Mark Potter)