Adecco 2Q profit rises as oil prices spur hir­ing

The Pak Banker - - COMPANIES/BOSS -

Adecco SA, the world's largest provider of tem­po­rary work­ers, posted a smaller-thanes­ti­mated rise in sec­ond- quar­ter profit as growth in North Amer­ica cooled amid a slow­down in the oil in­dus­try.

Net in­come in­creased 22 per­cent to 177 mil­lion eu­ros ($194 mil­lion), the Glat­tbrugg, Switzer­land-based com­pany said in a state­ment Tues­day. An­a­lysts pre­dicted 182.6 mil­lion eu­ros, the av­er­age of five es­ti­mates com­piled by Bloomberg.

Adecco is a bell­wether for the econ­omy as com­pa­nies add tem­po­rary staff and use re­cruit­ment ser­vices when prospects are brighter.

Lower oil prices are help­ing growth in Europe, spurring com­pa­nies there to hire work­ers, yet they are ex­ert­ing pres­sure on the No. 2 mar­ket of North Amer­ica, par­tic­u­larly Canada.

"The lower euro and lower energy costs, which have re­moved a hand­i­cap to Europe com­pared to the U.S., are for sure help­ing ex­port- ori­en­tated com­pa­nies," Chief Ex­ec­u­tive Of­fi­cer Pa­trick De Mae­seneire, who's leav­ing the com­pany at the end of the month, said in a tele­phone in­ter­view.

Sec­ond-quar­ter rev­enue in Adecco's main mar­ket, France, rose 2 per­cent ex­clud­ing cur­rency swings, ac­qui­si­tions and di­vesti­tures. Sales in North Amer­ica also in­creased 2 per­cent, slow­ing from the 4 per­cent rise in the first quar­ter.

"I'm not wor­ried U.S. rev­enue will go into neg­a­tive ter­ri­tory, but we do see that the en­gi­neer­ing busi­ness is un­der pres­sure," he said. "In Canada we are ex­posed to the oil busi­ness. In the U.S. it's mainly that cap­i­tal in­vest­ments are not there." Adecco dropped 2.8 per­cent to 79.95 Swiss francs at 10:25 a.m. in Zurich.

"Adecco's growth is pro­gress­ing steadily but yet at a mod­est pace," Michael Foeth, an an­a­lyst at Von­to­bel in Zurich, wrote in a note to clients. He has a hold rat­ing on the stock.

Rev­enue climbed 4 per­cent or­gan­i­cally to 5.58 bil­lion eu­ros, ver­sus an av­er­age es­ti­mate of 5.56 bil­lion eu­ros.

Earn­ings be­fore in­ter­est, taxes and amor­ti­za­tion rose 10 per­cent to 272 mil­lion eu­ros ex­clud­ing one-off items and the im­pact of cur­rency swings, ac­qui­si­tions and di­vesti­tures.

Adecco con­firmed its tar­get for an Ebita mar­gin ex­ceed­ing 5.5 per­cent of sales this year, de­pen­dent on rev­enue growth in the sec­ond half.

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