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UPDATE 2-Adecco sees gradual recovery in European job market
May 8, 2014 / 5:55 AM / 4 years ago

UPDATE 2-Adecco sees gradual recovery in European job market

* Staffing firm Adecco CEO says “worst behind us” in Europe

* Staffing sector serves as barometer of economic health

* Net profit rises by 64 pct, in line with forecasts

* Shares up 1.7 pct (Recasts with Europe, adds share price move, CEO comment, bullets)

By Joshua Franklin

ZURICH, May 8 (Reuters) - Adecco SA, the world’s largest staffing company, said on Thursday the worst was behind Europe’s labour market as the region’s fragile recovery helped revenues grow in the first three months of the year.

The staffing sector is generally seen as a barometer of economic health, since companies tend to hire temporary workers at the beginning of a recovery when most businesses are reluctant to commit to full-time hiring.

Zurich-based Adecco relies on Europe for more than half its sales, and the group said revenue growth throughout this key region in the first quarter of 2014 boded well for the future.

“The fact that all European countries are now in positive territory and a number of countries are in double digit growth is a very good indicator and confirmation we have the worst behind us,” Chief Executive Patrick De Maeseneire told Reuters in a telephone interview.

“It will be a slow recovery, there will be a bump here and there, but for sure we have the worst behind us.”

Organic revenue growth in Europe was strongest in Italy, up 14 percent, while Germany and Austria grew by 13 percent. France, Adecco’s largest market, saw sales growth of 1 percent after many quarters of stagnation and decline.

Adecco’s growth adds to mounting optimism in the sector, after rivals Manpower Group Inc and Randstad both reported positive quarterly earnings last month.

De Maeseneire did caution it would be a while yet before Europe saw a significant upturn in full-time positions.

“Companies only start to hire fixed when there is real scarcity and competition for talent,” De Maeseneire said. “If you look at unemployment numbers in Europe which are still around 12 percent this will take some more time.”

Adecco posted a 64 percent rise in net profit in the first three months of the year compared to last year to 110 million euros ($153 million), in line with estimates in a Reuters poll. Revenue came in at 4.7 billion euros, a rise of 6 percent in local currencies and 2 percent on a reported basis.

Shares in Adecco were trading up 1.7 percent at 72.45 Swiss francs by 0848 GMT.

$1 = 0.7183 euro Editing by Catherine Evans

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