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Adecco revenue falls 27%, but sees improvement

November 05 2009
Staffing Industry Analysts North American Daily News

Adecco SA announced third-quarter revenue fell 27.1% to euro3.72 billion (US$5.43 billion) from euro5.10 billion in the same period last year. But the world's largest staffing firm said things are looking up.

"Market conditions have improved during the third quarter, especially in general staffing," said CEO Patrick De Maeseneire.

Commercial staffing picked up most noticeably at its U.S. and Canadian operations and in France, according to the company.

Adecco's third-quarter U.S. and Canadian revenue fell 20.0% to euro525.0 million (US$766.1 million) from euro656.0 million in the same period last year. Adecco said it's now including Puerto Rico in its U.S. and Canadian revenue, and the 2008 revenue number has been restated to reflect the change.

U.S. and Canadian office and industrial staffing revenue in the third quarter fell 33% in constant currency following a second-quarter decline of 41%, the company said.

Third-quarter information technology revenue in the U.S. and Canada fell 24% on a constant currency basis. The region's engineering and technical revenue fell 22%, and finance and legal revenue fell 41% -- all on a constant currency basis.

Adecco may soon expand its U.S. operations. It announced in October that it would acquire MPS Group Inc. (NYSE: MPS), a Jacksonville FL-based professional staffing firm, for $1.3 billion. MPS ranks as the 13th largest global staffing firm, and it operates the Beeline vendor management system.

Adecco's third-quarter gross margin narrowed to 17.7% from 18.0% in the year-ago quarter. The company said temporary staffing and a weak permanent placement business hurt gross margin, but those results were partially offset by its outplacement business.

Pricing in the temporary staffing business became more challenging, the company said. And third-quarter permanent placement revenue fell 54% on a constant currency basis to euro40 million (US$58.4 million). Outplacement revenue, however, rose 31% on a constant currency basis to euro65 million (US$65.0 million).

Adecco reported net income of euro90.0 million (US$131.3 million), down 46.4% from net income of euro168.0 million in the third quarter of 2008.

For the fourth quarter, the company said it plans euro35.0 million (US$51.1 million) in restructuring costs.

Adecco SA
For the third quarter ended Sept. 30, 2009, compared with the same period in 2008.
Revenue: euro3.72 billion (US$5.43 billion), -27.1%
Net income: euro90.0 million (US$131.3 million), -46.4%


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