Adecco net profits beat expectations

Adecco is the world's top employment service firm Keystone

Swiss-based Adecco posted a 37 per cent increase in net profit to €453 million (SFr708.5 million) last year due to a divestment gain and tax benefits.

This content was published on March 3, 2006 - 07:57

On Friday the world's largest recruitment firm also announced it was in takeover talks with Russia's leading staffing company.

Gross profit rose to nearly 17 per cent, up 20 basis points (0.2 per cent) from a year ago, a company statement said.

Adecco added it expected to boost its operating margin, which came in at 3.4 per cent in 2005, to over five per cent by 2009.

"Assuming that the overall economic conditions remain favourable, I am confident that we will achieve revenue growth of seven to nine per cent in the years to come," said Adecco chairman and chief executive Klaus Jacobs.

He added that tie-up talks were underway with Russia's largest recruitment firm, Ancor.

Analysts say the deal would give Adecco access to one of the world's fastest-growing markets following its deregulation in recent years.

New management

Adecco is undergoing an internal transformation since the former CEO, Jérôme Caille, left last year after a string of disappointing results and Jacobs took over in the interim.

The company clinched control of its much smaller German rival, DIS, last month in a bid to gain access to its management team.

Adecco has secured 79 per cent of DIS shares, surpassing the company's stated target of 75 per cent.

Last month Adecco increased its cash tender offer from SFr85 to SFr91 per share, a move that prompted the two largest holders of outstanding shares, German industrial giant Voith and British-based Jupiter Asset Management, to agree to sell, according to Adecco.

But Jacobs told a news conference on Friday that he regarded the capture of outstanding shares to be a bonus rather than a necessity.

"I am not one who always wants 100 per cent and is willing to pay any price for it. If they [other shareholders] want to stay then I can live with that."

DIS chief executive Dieter Scheiff and chief financial officer, Dominik de Daniel, who both have a proven track record, are to become Adecco CEO and CFO.

"I think we will be able to convince the board of directors that these two gentlemen will be there in the long run for both Adecco and DIS."

Jacobs said he hoped they would take up their jobs in May.


Adecco's improved performance is down to stronger demand for staff, driven by an accelerating world economy. Rivals Manpower and Randstad have already posted solid earnings for last year.

Adecco, which traditionally places temporary staff, has more recently been focusing on expanding its services in the professional and permanent placing business.

It has seen stronger growth in Germany and the Netherlands, thanks to labour market deregulation in those countries. But it has had more trouble in its biggest market, France, where demand has been weaker and competition more intense.

swissinfo with agencies

In brief

Adecco offers permanent and temporary staffing services in the commercial, industrial and technical sectors.

The group is present in 75 countries and employs more than 33,000 full-time staff around the world.

Around 700,000 people are employed worldwide through its temporary staffing services every day.

Adecco - the world's biggest provider of temporary workers - was born out of the merger of Switzerland's Adia and French company Ecco in 1996.

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