Bloomberg

(Bloomberg) -- Adecco SA, the world’s largest provider of temporary workers, reported first-quarter revenue that beat analysts’ estimates as accelerating European economic growth prompted companies to hire.

Sales rose 5 percent to 5.33 billion euros ($6.06 billion) from 5.08 billion euros year earlier, Glattbrugg, Switzerland-based Adecco said Tuesday in a statement. That beat the 5.28 billion-euro average of six analyst estimates compiled by Bloomberg. Earnings before interest, taxes and amortization fell 4 percent to 228 million euros. Revenues from France, Adecco’s biggest market, rose 7 percent to 1.1 billion euro.

“France is slowly recovering,” Chief Executive Officer Alain Dehaze, who took over the role in September, said on Bloomberg TV. “It’s not an explosive recovery, it’s a continuous recovery.”

Adecco is a bellwether for the global economy as companies use recruitment services to bring in temporary staff when business prospects are rising. A renewed drop in consumer prices in April overshadowed the euro area’s fastest economic growth in a year and prompted warnings about its impact on wages from the European Central Bank. As unemployment declined in March to the lowest since 2011, the European Commission told the 19-nation bloc’s largest economies to reduce debt and modernize labor markets.

The company completed its acquisition of Penna Consulting Plc, announced in March in an attempt to expand in the U.K. market. First-quarter revenues from U.K. and Ireland, which make up Adecco’s third largest market, were unchanged at 545 million euro. The acquisition comes as the U.K. debates the merits of being part of the European Union ahead of a June 23 referendum.

Adecco has fallen 10 this year in Zurich trading, slightly beating the benchmark Swiss Market Index, which has declined 11 percent in the period. Earlier this year, the stock was at its cheapest since 2008 relative to the main Swiss equity gauge. It is now trading 11.3 times its estimated earnings as the gap has been narrowing.

First-quarter net income fell 10 percent, to 144 million euros. Adecco reiterated its target for Ebita margin of an average of 4.5 percent to 5 percent through 2020, after cutting it at the start of 2016. In the first three months, it narrowed to 4.3 percent of revenue from 4.6 percent.

To contact the reporter on this story: Roxana Zega in Zurich at rzega@bloomberg.net. To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, Cecile Vannucci at cvannucci1@bloomberg.net.

©2016 Bloomberg L.P.

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