Adecco profits soar as temp work bounces back in Europe

Thursday 08 May 2014 11.31
Adecco results confirm the long-depressed European market is on the rebound
Adecco results confirm the long-depressed European market is on the rebound

The world's biggest temporary staffing group Adecco today announced a better than expected net profit for the first quarter, confirming that the long-depressed European market is on the rebound. 

For the first three months of the year, the Swiss company said its net profit swelled 64% to €110m.

That beat the expectations of analysts, who had anticipated a net profit of €107m for the quarter. 

Adecco's revenues grew 2% to €4.6 billion during the quarter, but the company stressed that excluding the negative impact of currency fluctuations it actually expanded 6%. 

The strong performance seemed to confirm that its long-struggling European market has indeed returned to growth. 

"Revenue growth continued to pick up in Europe, led once again by our Industrial business," company chief Patrick De Maeseneire said in the earnings statement.

"Demand in manufacturing accelerated further, which is a good early-cycle indicator," he added.

In France, the group's largest market, it saw sales inch up 1% during the quarter to €1 billion, driven by a 3% jump in its industrial activities, which account for the lion share of its revenues in the country. 

This marked the first time since late 2011 that Adecco's French business has shown growth. The company's office activities in the country however saw revenues plunge 16% during the quarter. 

Revenues meanwhile ballooned 16% on the neighbouring Iberian peninsula (Spain and Portugal), and 14% in Italy.

In North America, Adecco's second largest market, the company saw its revenues rise 2% to €874m.

On a global scale, the company said it expected demand for temporary staffing to continue to grow this year.

Recent positive reports from Adecco's main competitors also testify to that trend, with US company Manpower seeing its sales rise 3% in the first quarter, while Dutch firm Randstad posted a 4% hike.