Adecco beats forecasts but margin drops

 
Elizabeth Fournier
ADECCO, the world’s biggest staffing company, beat profit forecasts yesterday as uncertain job markets drove the demand for temporary staff, but margins at the company were squeezed by a poor performance in its professional division.

Revenue at Adecco rose by 11 per cent to €5.2bn (£4.56bn), while net income jumped 45 per cent to €141m, beating the €122m forecast.

The company’s gross margin fell 90 basis points to 16.9 per cent, which the group said was driven by its business mix.

The firm’s biggest market, France – which delivers 31 per cent of revenues – grew by 15 per cent, with demand for both industrial staff and permanent placements remaining strong throughout the quarter.

“We had again very solid double-digit revenue growth this quarter, still driven by strong demand in the industrial segment,” said chief executive Patrick De Maeseneire.

“With the current economic uncertainties, we keep a close lid on our cost base, and will only invest where prospects are promising,” he added.

Revenues in the UK and Ireland were flat at €406m, while Italy saw the greatest rise, with revenues up 35 per cent. Germany and Australia collectively saw revenues jump 31 per cent.

The company also took an €11m hit from the bond refinancing it completed in April this year.

Adecco’s update spooked some investors hoping for a more positive outlook, and its shares tumbled 10.7 per cent to close at CHF34.50 yesterday.