Adecco “on track” after profit boost

Adecco is the world's top employment service firm Keystone

Swiss staffing company Adecco has posted a net profit of €611 million (SFr985 million) in 2006, up 35 per cent on the previous year.

The figures for the world’s largest recruitment firm, released on Friday, were well ahead of expectations and were boosted in part by a year-end tax break.

Revenues at Adecco, which has its headquarters near Zurich, were up 12 per cent to €20.4 billion, slightly below expectations, lifted by last year’s acquisition of DIS, a German jobs firm, in a deal valued at around €666 million.

“We are well on track to reach our long-term goals of seven to nine per cent annual revenue growth, as well as an operating margin of over five per cent and a return on capital employed of above 25 per cent by 2009,” said CEO Dieter Scheiff.

“Our value oriented management approach and focus on professional and specialised staffing, combined with the continued favourable economic environment for the industry as a whole, make me optimistic about Adecco’s future growth and returns.”

The company said a one-time tax benefit related to the release of a valuation allowance in the United States boosted the fourth-quarter result.

Adecco had been expected to post a 21 per cent rise in full-year net profit to €550 million, according to the average figure from a poll of analysts.

Sales were seen up 12 per cent in 2006 at €20.55 billion.

Pick-up

Adecco’s internal transformation, in place since the former CEO Jérôme Caille left in 2005 after a string of disappointing results, appears to be bearing fruit.

In Adecco’s largest market, France, revenues rose by eight per cent to €6.8 billion in 2006, helped by an economic pick-up.

The French market has long been a problem for Adecco, with a depressed economy creating high unemployment, and the company’s large exposure to slow-growing industries led to below-market growth in the last few quarters.

In the United States and Canada 2006 revenue rose one per cent to €3.7 billion, dragged down by a four per cent decline in fourth quarter revenues.

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.