Adecco Earnings Beat Estimates as CEO Sees Europe Turning
Adecco SA (ADEN), the world’s largest provider of temporary workers, posted a 12 percent increase in second-quarter earnings and signaled signs of a turnaround in Europe. The shares rose to the highest price since March 2011.
Net income rose 12 percent to 126 million euros ($168 million), beating the 112.1 million-euro average estimate of eight analysts in a Bloomberg survey. Organic sales declined 3 percent to 4.9 billion euros, the Glattbrugg, Switzerland-based company said in a statement today.
“Labor markets are starting to stabilize around Europe and we see some more positive signs in our business,” Chief Executive Officer Patrick De Maeseneire said today in a statement. “The steady improvement so far this year is encouraging for the second-half outlook.”
De Maeseneire, the former chief of Barry Callebaut AG (BARN) who became head of Adecco in 2009, has presided over a share-price rise of about 35 percent this year, as the decline in Europe’s job market slowed. The euro area probably exited recession in the three months through June after a record six quarters of economic contraction, according to a survey of economists compiled by Bloomberg.
Adecco closed 3.74 percent higher at 62.40 euros in Zurich, giving the company a market value of 11.8 billion francs ($12.8 billion).
Second-quarter revenue fell 12 percent on an organic basis in France, which accounts for about 25 percent of group sales. In Iberia revenue declined by 2 percent while in Germany, Austria and Italy sales were flat on the same quarter a year earlier, Adecco said.
Monthly sales will stop declining in the second-half compared with the same period a year earlier, “let’s say after the summer between September and December,” De Maeseneire said in a phone interview today.
Adecco and Randstad Holding NV (RAND) said July 11 they’re among temporary-staffing companies that are being probed by French regulators investigating whether they infringed competition rules. Adecco is fully cooperating with regulators, the company reiterated today.
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