* Q2 net profit 126 mln euros vs 112 mln in poll
* Underlying revenues fall 3 pct to 4.93 bln euros
* Says on target for EBITA margin of 5.5 pct by 2015
* Plans new share buyback of up to 250 mln euros
* Shares rise 4.2 percent
(Adds CEO comments, analyst, shares, details on markets)
By Caroline Copley
ZURICH, Aug 8 European labour markets have
reached a turning point, world No. 1 staffing firm Adecco
said on Thursday, as it beat second-quarter profit
expectations and saw its shares surge to a two-and-a-half year
Staffing firms are regarded by analysts as good indicators
of future economic trends and Adecco's more optimistic tone
about the euro zone could add to expectations it will move out
of recession later this year.
Adecco's underlying revenues, excluding currency moves and
acquisitions, fell 3 percent in the second quarter to 4.93
billion euros ($6.57 billion), in line with expectations and an
improvement on the 7 percent decline in the first quarter.
That trend had continued, with revenues down 2 percent in
June and a similar level in July, said the Swiss firm, which
makes roughly 45 percent of revenues in the euro zone.
"We have reason to believe that we are at a kind of a
turning point and that we will turn positive in the second half
of the year," Chief Executive Patrick De Maeseneire told
Reuters, adding the chemicals and logistics sectors were driving
His comments echo Dutch rival Randstad and U.S.
firm ManpowerGroup Inc which have also sounded more
upbeat about European economies.
De Maeseneire cautioned that he did not expect "tremendous
economic growth" for a number of years, but said Europe was now
over the worst.
The number of jobless in the euro zone fell for the first
time in more than two years in June, while business surveys show
manufacturing activity in the region is growing again.
Shares in Adecco, which have risen more than 16 percent in
the past two months, were trading up 4.2 percent by 0850 GMT at
62.65 francs. The European industrial goods and services sector
was up 0.2 percent.
"Adecco fulfilled expectations on all levels. The outlook
statement is quite promising," said J. Safra Sarasin analyst
While underlying revenues in Germany, Italy and Nordic
countries were flat, they were down 12 percent year-on-year in
France, Adecco's biggest market, compared with a 17 percent fall
in the previous quarter.
"France is a market where reforms did come very late and I
think still a number of things have to be done, in terms of
productivity," De Maeseneire said.
He said Southern Europe, where salaries have fallen and
productivity has improved, was now more competitive.
Adecco said it was cooperating with the French authorities
over an investigation into staffing companies concerning alleged
violations of French competition law.
A particular bright spot for the company was Britain, where
underlying revenues rose 4 percent as the government hired more
temporary workers. North America grew 3 percent and emerging
markets were up 8 percent.
Growth in its higher margin professional staffing business
and its focus on cost discipline helped profitability. Net
profit jumped 12 percent to 126 million euros in the quarter,
beating forecasts for 112 million.
Adecco confirmed its target for an earnings before income
tax and amortisation (EBITA) margin of above 5.5 percent by
2015. In the second quarter, the EBITA margin rose 40 basis
points to 4.1 percent.
It said it planned a new share buy back programme of up to
250 million euros.
($1 = 0.7508 euros)
(Editing by David Cowell and Mark Potter)